China Merchants Port to acquire 90% of Brazilian container terminal TCP

– China Merchants Port to pay R$2.9 billion for its stake, valuing TCP at R$3.2 billion
– Transaction is the first investment by China Merchants in Latin America

On september 4th 2017, China Merchants Port Holdings Company Limited (“CMPort”), Advent International (“Advent”) and the founding shareholders of TCP Participações (“TCP”) announced that they have signed a binding agreement whereby CMPort will acquire 90% of TCP’s shares for approximately R$2.9 billion (US$925 million). TCP manages the Terminal de Contêineres de Paranaguá, one of the largest container terminals in South America, and the logistics company TCP Log.

MTBS was assigned by China Merchants Port to conduct the commercial due diligence. Our services included an economic review, a container volume projection for Brazil and a competitive assessment to develop volume scenarios for the target, a tariff analysis, and reviews of the capacity, operational expenditures, investments and main agreements. The results were summarised in a DD report and a financial model to support the investor in preparing its bid and conducting negotiations.

With an annual capacity of 1.5 million twenty-foot equivalent container units (TEUs) and ongoing expansion that will increase its capacity to 2.4 million TEUs by 2019, TCP has the concession to operate one of the largest container terminals in Brazil. Located in the port of Paranaguá in Paraná State, the terminal is one of the main hubs for the import and export of cargo in Brazil, moving approximately 10% of all the containers handled in the country. Goods handled by TCP include frozen meat, a segment in which the company is the market leader with the largest number of refrigerated containers in the country; wood; components for the auto industry; chemicals; and electronic equipment. In addition to the container terminal, TCP is involved, through its TCP Log subsidiary, in door-to-port logistics, providing complete, integrated solutions to its importer and exporter clients and the largest shipping companies in the world.