Oaktree Capital Management has formed a strategic partnership with Watco Companies that will see the Los Angeles-based private equity firm invest USD450 million in the Kansas-heaquartered transportation company.
According to Watco, the strategic partnership and capital investment will allow Watco to continue its growth initiatives, including its expansion through mergers and acquisitions (M&A).
Oaktree’s transportation infrastructure strategy is led by co-portfolio managers Emmett McCann and Josh Connor. Both McCann and Connor will be joining the Watco board of managers.
McCann explained: “We believe the US transportation infrastructure sector is attractive for long-term investment and ownership … Having spent more than 40 years in and around transportation and railroading, I view this as an incredibly interesting point in time for the rail and freight transportation industries.”
In addition to its rail services, Watco owns and operates Greens Port Industrial Park. HLPFI readers will recall that in April 2018, Watco acquired the leasehold ownership of Industrial Terminals from Industrial Maritime Carriers (IMC) and Intermarine. The terminal consists of three deepwater berths designed for heavy lift and breakbulk cargo handling.
Oaktree Capital Management, meanwhile, has a long history of investing in the transportation sector. The private equity fund invested approximately USD280 million into Beluga Shipping in 2010, before the carrier was declared bankrupt in March 2011.
Most recently, Oaktree-backed Hansa Heavy Lift filed for insolvency in December 2018, as HLPFI reported here.