First State Investments (FSI) has reached an agreement with SteelRiver Infrastructure Partners to acquire 100 percent of the equity of Patriot Rail and Ports, which operates a portfolio of 12 short-line freight railroads with more than 585 track miles across 14 states in the United States.
Financial terms were not disclosed.
Jacksonville, Fla.-based Patriot represents the initial unlisted infrastructure investment in
the U.S. by FSI, which manages more than $8 billion of unlisted infrastructure investments across the United Kingdom, continental Europe, Australia, New Zealand and North America, with a focus on mid-market companies in the transportation and utility sectors worldwide. As part of its acquisition strategy, FSI has partnered with MidRail LLC, a group that focuses on originating, acquiring, and developing rail assets and operations in North America.
“Patriot is a great addition to our global infrastructure investment portfolio and provides further diversification by sector and geography,” said Danny Latham, a Sydney-based founding partner in FSI’s unlisted infrastructure business. “It is consistent with our philosophy of ‘buy and build’ on behalf of our 100-plus global investor base including a number of pension fund and insurance company clients in the U.S. and Canada.”
Patriot’s operations include line haul and local rail service in addition to rail-related services such as railcar storage, transloading, railcar cleaning, scrapping, repair and maintenance, and contract switching. The Patriot ports business provides terminal stevedoring, logistics and warehousing services across nine terminals and two cold-storage facilities in the Southeastern United States.
“The short-line freight rail sector, providing essential transportation services to industrial regions in the U.S., is a strong fit with First State’s long-term infrastructure investment strategy and mandate,” said John Ma, director of the New York–based FSI infrastructure team.
John Fenton, CEO of Patriot added, “More than ever, short-line rail is a key player in the efficient movement of freight in this country. We look forward to working with First State Investments on growing Patriot’s business over the long-term, with a continued focus on delivering value, service and safety to our customers through the dedicated effort of our employees.”
FSI (known in Australia as Colonial First State Global Asset Management) has invested in unlisted infrastructure since 1994 with a focus on mid-market transportation and utility assets. FSI established its unlisted infrastructure presence in North America in 2018 with a team in New York.