Canada Pension Plan Investment Board (CPP Investments) and Ontario Teachers’ Pension Plan Board (Ontario Teachers) announced the completion of the tender offer period to purchase 40% of the shares of Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V. (IDEAL). This step concludes the shareholders’ acceptance of the offer of affiliates of Ontario Teachers’ and CPP Investments to purchase the shares of IDEAL.

In accordance with Mexican law, the acquired shares will be transferred to CPP Investments and Ontario Teachers’ on April 17, 2020 and the tender offer will formally settle on April 23, 2020.

The acquisition, which was first announced in November 2019, follows a tender offer in the Mexican stock exchange on March 18 for shares in IDEAL at MXN 43.96 (US$ 1.85) per share. CPP Investments will own a 23.7% interest in IDEAL alongside a 16.3% stake owned by Ontario Teachers’. The current majority owners of IDEAL’s outstanding shares will continue to hold a majority shareholding in the company.

IDEAL is a sizable and important investment that provides exposure to existing and future infrastructure projects throughout Mexico. IDEAL’s portfolio includes 18 infrastructure concessions in Mexico (13 toll roads, three logistics terminals and two wastewater treatment plants), as well as an electronic toll collection service business and an operations business. IDEAL, Ontario Teachers’ and CPP Investments are already partners in the Arco Norte and Pacifico Sur toll roads.

As part of the arrangement, a subsidiary of IDEAL will form an infrastructure investment trust known locally in Mexico as a FIBRA-E (Fideicomiso de Inversión en Energía e Infraestructura). This FIBRA-E is subject to certain transaction steps and filings that are yet to be finalized. The FIBRA-E will subsequently be funded by IDEAL, CPP Investments and Ontario Teachers’, through certain affiliates. This is expected to occur before the end of April. The FIBRA-E structure was introduced in Mexico in 2015 to encourage private-sector investment in infrastructure projects.

The FIBRA-E will be managed by a subsidiary of IDEAL and purchase partial stakes in four of IDEAL’s toll roads: Arco Norte, Chamapa – La Venta, Toluca Bypass and Tijuana – Tecate. Following the completion of this funding, a secondary offering led by CPP Investments and Ontario Teachers’, through certain affiliates, will reduce their ownership to minority positions, while also introducing other investors.