Listed investment company BBGI Global Infrastructure will acquire a 25% stake in a Montreal hospital P3 from Obrascón Huarte Lain (OHLA) for approximately CAD 88m (USD 71m), the company announced on Wednesday.
The public-private partnership, the Centre Hospitalier de l’Université de Montréal, reached substantial completion earlier this year and comprised the design, build, finance and maintenance (DBFM) of the new teaching hospital located in Montreal, Quebec. The new hospital has 772 private patient rooms, 39 operating theatres and 415 examination rooms.
McMillan acted as BBGI’s legal advisor. Turner & Townsend acted as technical advisor, Marsh / JLT as insurance advisor, and BDO as tax monitor. Rubicon Capital Advisors acted as OHLA’s exclusive M&A advisor.
Availability payments are received from Center Hospitalier de l’Université de Montréal and funded by the Province of Québec. Both the CHUM and the Province of Québec are rated AA-/Aa2 by S&P and Moody’s, respectively.
“In the past 18 months, the Covid-19 pandemic has underlined the resilience of availability-based social infrastructure investments, supported by secure public sector-backed contracted revenues, which have suffered no material adverse operational or financial impacts, and offer stable, predictable cash-flows with strong inflation-protected characteristics,” said BBGI’s co-CEO Duncan Ball. Ball added that the interest in social infrastructure remains strong partly due to the fact that the sector performed well during the pandemic.
BBGI is funding the acquisition by drawing upon its GBP 230m corporate revolving credit facility and existing cash resources.
The original CHUM consortium, Collectif Montréal Santé, used a CAD 1.37bn bond issuance in 2011 to help finance the CAD 2bn construction cost of the complex.