Australia's Adsteam sells U.S. barge operation
Australia's Adsteam Marine Limited says that Northland Holdings, Inc. (50% owned by Adsteam) has sold its freight business. The price wasn't disclosed, but one Australian press report puts it at around A$28 million--about US$21.5 million.
Northland Services was founded in 1977 by Jim Haagen and of Seattle; Dunlap Towing Company of LaConner, Wash.; Mick Leitz of Portland, Ore.; and L.C. Campbell of Wrangell, Alaska. In 1997, they sold Northland to Booth Creek Holdings, owned by George Gillett. In 2000, Adsteam Marine Limited of Australia joined Booth Creek as the majority co-owner by purchasing the controlling interest in Northland.
A statement from Northland Services says that now "the management team and founding owners of Northland Services, Inc., in partnership with Endeavour Capital, have completed a management buyout of the Seattle-based common carrier and contract barge freight service company that provides service between Seattle and destinations in Alaska and Hawaii.
Adsteam says net proceeds realized from the divestment are "in line with expectations" and represent approximately 50% of Adsteam's book value for the Northland business. Cash from the sale will be used to retire Northland's existing term debt. Adsteam will retain its interest in Northland's fuel business until sold.
John Moller, Managing Director of Adsteam Marine said, "The sale of the U.S. freight business has been made ahead of our original schedule. This a good outcome and is an important milestone in the business."
Adsteam says that, as previously announced, negotiations are continuing on the sale of Northland's fuel business and that it is working through regulatory approvals.
Northland president and CEO Tom Martin, together with Barry Hachler, senior vice president and CFO; Shawn Bohnert, executive vice president; and 11 other Northland employees have now purchased the marine freight company today from Adsteam and Booth Creek, bringing ownership back to the Northwest.
"Our customers depend on us for essential freight service from Seattle to more than 125 destinations throughout Alaska and across the Pacific to ports throughout Hawaii," said Martin. "And we've proven that we have the experience and capability to meet these demanding requirements. Now, with local management owning the company, the continued dedication of our more than 300 employees and the support of Endeavour Capital and our team of regional investors, we have significantly strengthened our ability to meet our customers' unique transportation requirements."
Martin said Northland will continue to operate from its current Seattle headquarters and its marine facilities at the Port of Seattle's Terminal 115. The company also will assume the labor contracts with the Inland Boatmen's Union of the Pacific (IBU) and its representation of employees at Seattle's Terminal 115 and in Whittier, Alaska.
Equity financing for the management buyout was provided by Portland- and Seattle-based Endeavour Capital, the Northwest's largest regional private equity firm.
"Our investment in Northland is representative of our commitment to invest in and grow exceptional companies throughout the Northwest," said Aaron Richmond, principal with Endeavour Capital in Seattle. "Together with our institutional and individual investors from Alaska, Washington and Oregon, we are proud to be a part of Northland."
Joining Endeavour as additional equity investors in Northland are Jim Haagen and Jim Dunlap of Seattle, who were original company founders and owners, along with Peter Brix and Joe Tennant of Portland. Ed Spaunhurst, a former CEO of the company, has returned to Northland as a consultant and member of the board of directors.
Debt financing was led by Bank of America in Seattle, along with a consortium of other banks, including Washington Mutual Savings Bank and LaSalle Bank National Association of Chicago.
Northland Services provides common carrier and contract barge services between Seattle, and destinations in Alaska and Hawaii.
The company operates from Terminal 115 on Seattle's Duwamish Waterway, including more than 70 acres of dock facility. Northland's facility hosted more than 150 barge calls for calendar year 2003 and handled more than 500,000 tons of freight. Northland utilizes a fleet of more than 30 tugboats and barges delivering freight to more than 125 destinations throughout Alaska.
Northland provides year-round, scheduled weekly service to southeastern Alaska, a region that has no land-route link with either the Lower 48 or the rest of Alaska.
The major population and commerce centers of Anchorage and Fairbanks are served via Northland's scheduled weekly service to the discharge port of Whittier by way of a space charter agreement on barges operated by the Alaska Railroad. Seasonally, Northland calls directly at Anchorage in conjunction with service to points in western Alaska from Dutch Harbor to Kotzebue including the Pribilof Islands.
Northland's Aloha Cargo Transport division sails from Seattle to Honolulu every three weeks. Other ports of call with Hawaii service include Nawiliwili (Kauai), Kaunakakai (Molokai), Kahului (Maui), and Kawaihae (Hawaii, the "Big Island").
About Endeavour Capital: Founded in 1991, Endeavour Capital (www.endeavourcapital.com) is the largest private equity firm investing in Pacific Northwest-based companies, with equity funds under management of $450 million and sales of current portfolio companies exceeding $2.0 billion. Endeavour's mission is to find and develop business opportunities where its contribution of capital, support, expertise and the patience of a long-term view, will result in superior returns to its partners and investors. The majority of Endeavour Capital's equity funds are committed from limited partners based in the region, including the Oregon Public Employees Retirement Fund, Washington State Investment Board, Rasmussen Foundation and the University of Washington.