Manchester Airports Group's £1.5bn acquisition of Stansted Airport will be funded by partial privatisation which council leader Sir Richard Leese said will deliver "maximum value for Manchester City Council and the other local authority shareholders."
Australian pension fund investor Industry Funds Management has acquired a 35% stake in MAG, which previously wholly owned by Greater Manchester local authorities.
MAG will pay £1.5bn to acquire Stansted from BAA after a highly competitive process. This represents an acquisition multiple of 15.6 times Stansted's EBITDA in 2012.
IFM has investments in nine airports across Australia, including five state capital airports. In the UK, IFM has investments in Anglian Water and Arqiva, a broadcast and wireless communications infrastructure company which is also a supplier to Transport for Greater Manchester and Manchester City Council.
Sir Richard Leese, leader of Manchester City Council, MAG's previous majority shareholder, said: "M.A.G is a key driver of jobs and growth in the North of England and the acquisition of Stansted will help us deliver maximum value for Manchester City Council and the other local authority shareholders."
Manchester City Council owned 55% of MAG and the rest of the shares were split equally between the remaining nine local authorities of Greater Manchester. Manchester will retain 35% and the others share 30%.
Charlie Cornish, chief executive of MAG, commented: "The transaction represents a significant milestone in the achievement of our previously stated strategy of adding a quality airport to the group and delivering long term value to our shareholders.
"MAG has a strong track record of creating shareholder value through strategic investment and enhancing operations to improve customer service and drive increased passenger numbers. We will use that expertise at Stansted to ensure that the airport can fulfill its potential as a high quality alternative London access point for global air travellers. Stansted has scope to benefit from significant volume growth over the short, medium and long term.
"Our bid for Stansted has been under development for well over a year. We have been delighted to work closely with IFM to create a compelling and unique partnership that has been instrumental in providing the capital for this important transaction which sees one of Europe's largest airport operators now based in Manchester."
JP Morgan Cazenove acted as financial adviser and RBS as debt adviser to MAG. Gleacher Shacklock LLP acted as financial adviser to IFM.