Saudi-backed Blackstone fund said to seek minority stake in Carrix

Blackstone Infrastructure Partners was established under an agreement calling for Saudi Arabia's Public Investment Fund to commit up to $20bn
Saudi-backed Blackstone fund said to seek minority stake in Carrix
Carrix is an operator of ports and rail yards in more than 250 locations around the globe.
By Bloomberg
Sun 10 Mar 2019 08:16 AM

Blackstone Infrastructure Partners is in talks to buy a minority stake in Carrix, the operator of ports and rail yards in more than 250 locations around the globe, according to people familiar with the matter.

The infrastructure fund, unveiled by Blackstone Group LP in 2017 after an unprecedented fundraising pledge by Saudi Arabia, is in talks to buy a non-controlling stake in Carrix, said the people, asking not to be identified because negotiations are private.

Carrix is the closely-held parent company of Seattle-based port operator SSA Marine. The value of the stake couldn’t immediately be learned.

Paula Chirhart, a representative for Blackstone, declined to comment and a representative for Carrix didn’t respond to multiple requests for comment.

Carrix’s ownership has changed repeatedly in recent years. It’s controlled by the founding Smith and Hemingway families, who in 2014 bought back a stake that had been held by Goldman Sachs Group Inc.’s Goldman Sachs Infrastructure Partners and others since 2007. Later, Mexico’s Fernando Chico Pardo bought 49 percent of FRS Capital Corp., which owns Carrix.

Blackstone’s fund was established under an agreement calling for Saudi Arabia’s Public Investment Fund to commit up to $20 billion based on matching outside investor commitments. But it’s unclear whether an investment in Carrix would use cash from PIF.

Bloomberg reported in October that the kingdom may abstain from transactions or be excused by Blackstone if its participation would impede deals from receiving US regulatory approval.

Carrix’s main subsidiary SSA Marine, founded in 1949, operates dozens of facilities in the U.S., Canada and Latin America, as well as overseas, including the Caribbean, Africa and Asia.

Blackstone’s fund amassed about $7 billion by the end of 2018, company co-founder Stephen Schwarzman said on an earnings call in January. That’s up from the $5 billion that Bloomberg reported it has raised at the end of June, indicating the fund had added roughly $1 billion of external capital during the year’s second half.

The infrastructure fund has “significant firepower to pursue large, unique transactions,” Schwarzman said in January. After agreeing that month to take control of Tallgrass Energy LP, it expected to announce a transportation deal “in a few months,” he said.

“Together, these two investments should provide additional momentum for a business we believe will ultimately become one of the largest infrastructure platforms in the world,” he said at the time. It’s unclear whether he might have been referring to a potential investment in Carrix.

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