October 18, 2010
ACL to be acquired by Platinum Equity associate
Barge giant American Commercial Lines Inc. (NASDAQ:ACLI), whose operations include Jeffboat, the largest inland shipbuilder in the U.S., says it has entered into a definitive merger agreement to be acquired by an affiliate of Platinum Equity. The transaction has an enterprise value of approximately $777 million. ACL's Board of Directors, acting on the unanimous recommendation of a Special Committee of independent directors, approved the agreement and has recommended the approval of the transaction to ACL's stockholders.
Platinum Equities ranks nineteenth in Forbes list of America's largest private companies. Forbes says it was founded in 1995, and specializes in acquiring and operating businesses throughout the world. "Its portfolio of businesses share common characteristics across a variety of industries, including the automotive aftermarket (Wheel Pros, American Racing Equipment), chemical manufacturing (DyStar), communications equipment and services (Covad Communications, Peak Technologies, USRobotics), equipment rental and leasing services (Maxim Crane Works) and steel services (Ryerson). The Platinum Equity portfolio is comprised of 25 businesses, with over 50,000 employees," says Forbes.
Under the terms of the agreement, ACL stockholders, other than GVI Holdings, Inc. and certain of its affiliates ("GVI"), will receive $33.00 in cash for each share of ACL common stock they hold. GVI will receive $31.25 in cash for each share of ACL common stock it holds if the transaction closes before December 31, 2010 and $33.00 per share thereafter. GVI has entered into a Voting Agreement to support the transaction.
"Following thorough analysis by a Special Committee of independent directors, our Board of Directors has determined that this transaction offers the best value for our stockholders," said Clayton Yeutter, chairman of the ACL board.
"ACL is a strong company with a dedicated team that has made significant improvements over the past two and a half years," said Mike Ryan, ACL president and chief executive officer. "We are optimistic that this progress, coupled with Platinum Equity's financial resources and experience in operations, will position ACL to continue executing our strategic initiatives."
"ACL has a rich heritage and a strong market position," said Louis Samson, the Platinum Equity principal who is leading the ACL acquisition. "ACL is a great fit for Platinum Equity. We share the company's commitment to safety, customer service, innovation, and integrity. We look forward to working closely with Mike Ryan and his management team, as well as all of the ACL employees, and customers."
The transaction is subject to customary closing conditions, including the expiration or earlier termination of the Hart-Scott Rodino waiting period and the approval of ACL's stockholders, but is not subject to any condition with regard to the financing of the transaction. Financing consists of a combination of equity contributed by Platinum Equity and debt financing provided by Wells Fargo Capital Finance, LLC. ACL expects the transaction to close in the fourth quarter of 2010. ACL intends to keep the company's existing senior secured notes outstanding and will comply with the indenture governing the notes, including making any required offer to purchase the notes upon a change of control.
Under the terms of the merger agreement, ACL may solicit acquisition proposals from third parties for a period of 40 calendar days continuing through November 27, 2010. It is not anticipated that any developments will be disclosed with regard to this process unless ACL's Board of Directors makes a decision with respect to a potential superior proposal. There are no guarantees that this process will result in a superior proposal.
BofA Merrill Lynch is serving as financial advisor to ACL. Hogan Lovells US LLP is serving as legal counsel to ACL and Richards, Layton & Finger, P.A. is serving as legal counsel to the Special Committee of ACL's Board of Directors. Latham & Watkins LLP is serving as legal counsel to Platinum Equity.