Canadian Investors Acquire North America’s Largest Terminal Operator

Canadian pension manager buys US port terminal operator
Ports America is expanding its terminal operatios in Baltimore (Ports America Chesapeake)

Published Sep 29, 2021 4:19 PM by The Maritime Executive

Canada’s largest private pension fund investment manager is acquiring North America’s largest marine terminal operator in a private transaction. The Canada Pension Plan Investment Board, which has been a minority investor in Ports America since 2014, said the transaction would provide for continuity in the operations while underscoring its confidence in the strong business outlook for the operation.

The Canadian investment manager, which manages over $400 billion for 20 contributors and beneficiaries of the Canada Pension Plan holds a broad portfolio of public and equities, real estate, infrastructure, and fixed income. They are buying the remaining investments in Ports America from California-based investment manager Oaktree Capital Management. Oaktree had been an investor in Ports America for 12 years. The transaction is expected to close in the fourth quarter of 2021.

"Ports America represents the opportunity to continue to invest in a high-quality operator that plays an important role in global trade, making the company a good fit for our long-term infrastructure investment strategy," said Scott Lawrence, Managing Director, Head of Infrastructure, CPP Investments. "Terminal operators play a crucial role as cargo demand and transportation requirements continue to grow in response to the rapid and dynamic changes in how individuals and businesses are buying and selling products."

Founded in 1921, Ports America today is the largest terminal operator in North America, with diversified operations across the country, including 70 locations in 33 ports on each of the United States' three coasts. The Company annually handles 13.4 million twenty-foot equivalent units (TEUs), including 10 million tons of general cargo, 2.5 million vehicles, and 1.7 million cruise ship passengers.

"At Ports America, our commitment and ability to provide our customers with excellent, safe service and long-term, strategic value informs everything that we do," said Mark Montgomery, Chief Executive Officer at Ports America. Commenting on the acquisition by CPP, he said "We share a long-term vision for Ports America and are excited to grow our capabilities and service offerings to position the company for another century of innovation, leadership, and success."

Ports America’s current operations encompass container, RoRo, breakbulk, military, and cruise ship operations. Recently, the company has been expanding its operations at the port of Baltimore, Maryland. Ports America Chesapeake is investing more than $110 million in marine terminal upgrades and will invest an additional $56 million in yard equipment, to support the ongoing growth of the Port of Baltimore and Seagirt Marine Terminal. Infrastructure enhancements to the terminal include four new container cranes and the upgrade of a second 50-foot berth, allowing Seagirt to handle two 14,000 TEU vessels simultaneously. In addition to technology advancements to the Terminal Operating System (TOS), improved weigh-in-motion truck scales, and advanced visibility tools, Ports America Chesapeake will also invest in new container handling equipment, including 15 hybrid-electric rubber-tired gantry cranes.