KKR & Co. Inc. [NYSE: KKR] disclosed that it has inked an agreement to purchase Japanese chemical storage tank operator Central Tank Terminal (CTT) from an associate of Macquarie Infrastructure and Real Assets (MIRA). CTT has earned a reputation as Japan’s largest independent chemical storage tank operator. It is providing over 300,000 cubic meters of storage capacity across seven terminals.
The seven terminals of the CTT are situated near key ports and strategic hubs around Tokyo Bay, Osaka Bay, Nagoya, and Kitakyushu. The Company offers tank storage and auxiliary services to more than 80 blue-chip customers. It covers major chemical companies with decades-long relationships with CTT. In 2020, CTT started sharing its environmental, social, and governance (ESG) performance based on the GRESB Infrastructure Asset Assessment. It has also shared lower-than-peer-average emissions and energy consumption intensities.
Strategic Rationale of Transaction
After the execution of the deal, KKR is intending to work alongside CTT’s management team to help improve the business’ operations and services on behalf of CTT’s customers, in addition to discovering bolt-on opportunities for growth. Moreover, the investment will be utilized to strengthen CTT’s leading position in the chemical storage tank industry and to engage in future growth opportunities, including bolt-on acquisitions.
Furthermore, this deal indicates KKR’s latest investment in Japan. It is built on its successful record as an active investor in the country. In addition to CTT, KKR has invested in Japan from its private equity strategy. Its investment includes Seiyu, Koki Holdings, Kokusai Electric, PHC, Marelli, and From Scratch. Additionally, the deal is likely to be executed by Q4 2021, dependent on regulatory authorizations and closing conditions.