Brookfield Infrastructure Partners L.P.
) announced that it has signed an agreement along with other
institutional investors to acquire a 27% stake in VLI. The total
investment will be R$2 billion (US$850 million) of which
Brookfield Infrastructure will invest $350 million. With this,
Brookfield Infrastructure will boost its presence in the fast
developing Brazilian market.
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VLI controls one of the largest rail and port logistics
businesses in Brazil and its operations cover eight states which
represent nearly 60% of the country's gross domestic product
(GDP). Infrastructure activity will pick up in Brazil ahead of
the two major sporting events - the FIFA World Cup in 2014 and
the Olympics in 2016.
VLI transports general cargo in Brazil through its integrated
system of railroads, ports and inland terminals. Its rail
consists of over 4,000 km under concession and is integrated with
five inland terminals and three ports.
The upcoming sporting events will place a huge demand on the
nation's transportation infrastructure. An integrated
transportation network will help in swift movements of
goods and people.
In Sep 2013, Brookfield Infrastructure expanded its market share
in the Brazilian toll roads platform by investing $490 million in
Arteris S.A. Arteris controls over 3,200 km of roads that account
for approximately 65% of Brazil's GDP and nearly two-thirds of
the 70 million vehicles that ply on Brazilian roads. This
investment allowed Brookfield to control 31% of Arteris.
The partnership has been a consistent performer and in that
process has surpassed the Zacks Consensus Estimate in the last
four quarters with an average beat of 8.66%. We expect this
strategic investment in South America to further boost its bottom
Brookfield Infrastructure Partners currently has a Zacks Rank #2
(Buy). Other operators in the industry, which look attractive at
current levels, include
The AES Corporation
Alliant Energy Corporation
). All these stocks carry the same Zacks Rank as Brookfield