A subsidiary of Saltchuk Resources will acquire Tropical Shipping and its related transportation, consolidation and cargo insurance companies from AGL Resources in a deal expected to total $220 million.
Saltchuk’s other companies include U.S. domestic carriers Totem Ocean Trailer Express, which operates between the Pacific Northwest and Alaska, and Sea Star Line, which operates between the U.S. mainland and Puerto Rico.
Tropical is an international-flag carrier, based in Riviera Beach, Fla., that operates to and from 25 ports in the Bahamas and Caribbean. The company was owned for years by Nicor Inc., which merged with AGL at the end of 2011.
Seattle-based Saltchuk said it plans to operate Tropical as a stand-alone unit.
AGL, an Atlanta-based energy services holding company, said it wants to concentrate on its core business of operating regulated natural gas utilities and related assets.
“While we have been responsible stewards of Tropical Shipping for the duration of our ownership, and have worked diligently to successfully increase profitability over the last two years, we have deliberately sought a more strategic owner for these assets,” said Andrew W. Evans, AGL’s executive vice president and chief financial officer.
Tropical posted earnings before interest and taxes of $12 million last year, compared with $8 million in 2012. AGL said it expects its cargo shipping segment including Tropical to contribute EBIT of $15 million to $25 million in 2014, including $9 million from its investment in Triton Container, which is not part of the sale.
AGL said after-tax cash proceeds and repatriated cash from the Tropical sale are expected to total approximately $220 million, subject to post-closing adjustments.
AGL said it expects to incur approximately $60 million in income tax expense related to repatriation of cash and investments held offshore and to capital gains on the purchase price above tax basis. The company expects to record a $19 million impairment charge related to goodwill assigned to Tropical in connection with the AGL-Nicor merger.