Textainer Group Holdings Limited (TGH) has announced that its wholly-owned subsidiary, Textainer Limited, has entered into an agreement to purchase Leased Assets Pool Company Limited (“LAPCO”) for a net value of US$66 million in cash (assets of $192 million less outstanding debt of $126 million).
“The Company intends to repay LAPCO’s existing debt at the closing and refinance the LAPCO containers which are managed by Textainer in one or more of the Company’s existing revolving credit facilities. The transaction is subject to certain closing conditions and is expected to close by year-end,” TGH said.
LAPCO’s fleet consists of approximately 163,000 TEU managed by Textainer and approximately 3,000 TEU of containers managed by other container lessors. LAPCO itself is an indirect subsidiary of Trencor Limited, which owns approximately 48% of Textainer’s common shares. The percentage of Textainer’s owned fleet will increase to 85.4% from 80.8% following the closing of the acquisition.
“We are very pleased with this acquisition which is in line with our strategy of focusing on our core container leasing business and bottom line. This acquisition of a large and seasoned portfolio of containers we already manage allows us to allocate Capex which will generate immediate contribution to our bottom line while minimizing risks normally associated with external fleet purchases,” commented Olivier Ghesquiere, President and Chief Executive Officer of TGH. “We expect this transaction to be accretive to earnings and to contribute to long-term growth in shareholder value,” he concluded.
The deal also reflects a consolidation by Trencor’s of its container assets into Textainer. Trencor had earlier decided to “unbundle” its shares in Textainer from its other assets by dual listing the company in South Africa. On the same day it announced the LAPCO deal TGH filed a “Pre-Listing Announcement” with the the Johannesburg Stock Exchange. The listing has been approved by Trencor’s shareholders and is expected to take place on 7 December, 2019.
Ghesquiere recently told analysts that Textainer is not expecting any operational changes to its business as a result of the dual listing.
