Terra Firma planning €2bn sale of Tank & Rast in 2015 – report

A recent Bloomberg report suggests that Terra Firma Capital Partners, the private equity firm founded by Guy Hands, is laying the groundwork for a sale of the German autobahn service station chain Tank & Rast GmbH, in a deal that could value the business at more than €2bn. The report cited a number of unnamed individuals who said Terra Firma had been meeting with potential advisors with the goal of selling the Bonn-based Tank & Rast in the first half of 2015.

According to Tank & Rast’s own website, the company operates 390 service stations and 350 petrol stations and 50 hotels throughout the German autobahn network, giving it about 90% of the market, while its food and drink concessions serve about 500m visitors annually. The highly cash-generative operating model is underpinned by long-term government concessions, which allows it to generate revenue through retail, restaurants, toilet facilities (a visit to the ubiquitous ‘Sanifair’ toilets now costs €0.70) and petrol sales.

The outlets now have 210 bakery counters, along with more than 250 Segafredo, Lavazza and Dallmayr coffee bars. (A notable exception is Starbucks, whose negotiations with Tank & Rast ended fruitlessly earlier this year). Other well-known brands offering their onsite products include Burger King, McDonalds and seafood restaurant chain Nordsee.

Terra Firma paid about €1bn to buy a majority stake in Tank & Rast in 2004. It subsequently sold half of its interest to Deutsche Bank subsidiary RREEF Infrastructure Management in 2007, using a €2.27bn leveraged loan financing to back the buyout. Both companies completed a €1.45bn debt refinancing last December.