Port acquisition for $450M could be sign of more ATCO deals in Latin America

ATCO Group could be poised to strike more deals in Latin America after announcing a $450-million investment in port infrastructure in Chile and Uruguay on Wednesday.

Best known for its logistics, modular trailers and power business units, Calgary-based ATCO announced it would buy a 40-percent stake in Chile’s Neltume Ports, a subsidiary of Montrealbased Ultramar.

The deal marks both a new business line for ATCO and also strengthening of its existing ties with Ultramar.

“While this is a new business for us, it has strong parallels to existing ATCO businesses with franchise like infrastructure opportunities, long-term contracts and a common customer base in the minerals industry,” ATCO chair and CEO Nancy Southern said on a conference call. The Southern family are controlling owners of ATCO’s voting shares.

“This is an investment that diversifies ATCO’s portfolio by industry and geography and further expands ATCO’s business activities in Latin America,” Southern said.

Calling it a “low-risk investment,” Southern said the ports would serve a common set of ATCO customers in the Chilean mining industry, some of which use the company’s remote workforce housing and trailers.

In 2016, ATCO purchased a 50-per-cent interest in Santiago, Chile-based Sabinco Soluciones Modulares S.A., which builds modular structures and workforce housing units for the region’s mining companies. Ultramar is also an investor in Sabinco.

“After a competitive sale process, we are proud to announce ATCO as our strategic partner — a partner with shared values and cultural fit with Ultramar,” Ultramar chair Richard von Appen said in a release distributed by ATCO.

The release also stated that ATCO’s investment “will be used by Neltume Ports to finance opportunities for growth.”