Steam Packet Company

Specialists in the transportation of passengers and freight to the Isle of Man

Montagu led the Management Buyout of the Steam Packet in July 2003 from Sea Containers. This business had a dominant position in the transportation of passengers and freight to the Isle of Man from ports in the UK underpinned by a long standing user agreement with the Isle of Man government.

The Steam Packet represented a very high quality, secure and cash generative business growing in line with a robust Manx economy. These features made it ideal for a leveraged buyout and as such our success in buying this business was at the end of a fiercely fought private equity auction.

The management team at the Steam Packet demonstrated to us a strong track record in improving the quality of services to the Manx residents including the £30 million capital expenditure for a new freight ferry, the Ben-my-Chree, in 1998. There was a symbiotic relationship between the Steam Packet and the Isle of Man economy. The business needed to continually monitor and respond to the capacity needs of the growing Manx economy to ensure the island was able to prosper. Montagu ensured finances were available to fund any appropriate capital expenditure going forward.

This was a complex deal and we needed to take a pragmatic and commercial line with the vendors to unwind the incumbent securitisation structure in the business. We completed the deal within four weeks of being granted exclusivity; a tight timetable important to the vendors to fit in with an impending capital repayment for the group.

In October 2005 Montagu sold the Isle of Man Steam Packet Company to Macquarie Bank for £225 million.

Deal details

Deal type: Management Buyout Investment Year: 2003 Country: United Kingdom Status: Realised Value: £162 million Industry Sector: Transport & Infrastructure