NEW YORK, May 24, 2004 - Castle Harlan, Inc., the New York private-equity investment firm, announced today it had signed a definitive agreement to purchase Horizon Lines, LLC, one of the largest American container shipping companies. The price of the transaction was set at $650 million.
The company, based in Charlotte, North Carolina, owns 16 vessels and approximately 21,700 cargo containers that handle 37 percent of marine container shipments between the U.S. mainland and ports in Alaska, Hawaii, Guam and Puerto Rico, and is the only carrier serving all of those markets.
Horizon is the largest container shipping company operating under the Jones Act, which requires that maritime trade between U.S. ports be conducted exclusively by companies owned and incorporated in the U.S. that use ships built and registered in the U.S. and that employ predominantly American crews.
"This is an outstanding company with solid growth prospects," said Marcel Fournier, the Castle Harlan managing director who led the negotiations. "It has a highly stable revenue base, well diversified cargo shipments and a stable core of strong customers."
He noted also that the nature of the business, as well as the Jones Act, provide high barriers to entry for any potential competitors.
"Horizon has an exceptionally strong and experienced management team that will continue with the company," Fournier added. "At Castle Harlan, we look forward to building on the firm foundation that was established over many years by CSX and continued by Carlyle, and helping the company move to the next level of profitability and success." He said senior management would continue to own an interest in the company.
Horizon recorded revenues in fiscal 2003 of more than $830 million, up 9.6 percent from the previous year, Fournier said.
Castle Harlan is acquiring the company from The Carlyle Group, a private-equity investment firm based in Washington, D.C, that had bought the company from CSX Corporation in February 2003.
Earlier this month, Castle Harlan agreed to acquire Caribbean Restaurants, LLC (CRI), operator of 165 Burger King restaurants in Puerto Rico, for $340 million. CRI is the market leader and the most successful quick-service restaurant franchise on the island.
Both CRI and Horizon will be purchased by Castle Harlan Partners IV, L.P., an investment fund totaling $1.163 billion in commitments that closed last September.
Founded in 1987, Castle Harlan is a leading New York private-equity investment firm, investing primarily in controlling interests in the buyout and development of middle-market companies in North America and Europe. Castle Harlan's team of 10 managing directors, including its founders, has completed more than 60 acquisitions with a total value in excess of $7 billion. The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.
Castle Harlan also invests in Australia, New Zealand and the Australasian region through its Sydney-based affiliate, CHAMP, which is one of Australia's oldest and largest private equity firms.
Castle Harlan's portfolio companies, which employ more than 26,000 people, include AdobeAir, Inc., a leading manufacturer of evaporative coolers; Associated Packaging Technologies, the country's leading manufacturer of CPET containers for the frozen food industry; and Advanced Accessory Systems, the largest manufacturer of automotive roof racks and tow systems in North America and Europe.