American Commercial Lines shareholders by an 80 percent margin on Tuesday approved a proposal by an affiliate of Platinum Equity to take the company private. Platinum is a merger, acquisitions and operations specialist.
ACL, a Jeffersonville, Ind., operator and builder of barges for the inland waterways, will sell some 10.2 million shares to Platinum for approximately $777 million, according to a Morningstar report published in October. The company posted $850 million in revenue at the end of 2009. Operations account for 75 percent of revenue with the balance from barge construction by its subsidiary Jeffboat.
According to Morningstar, ACL has had an up and down existence for the past seven years. It declared bankruptcy in 2003 because of the combination of high financial leverage, overcapacity and low cargo rates. The company came out of bankruptcy in 2005, and did well until the recession drove share prices down from $139 in early 2007 to $12 in the last half of 2009. The share price has slowly recovered and closed Tuesday just under $33 per share.
ACL news from JOC:
American Commercial Lines Narrows Loss.
Morningstar reported that ACL has traditionally relied on bulk grain shipments, and its fortunes have risen and fallen with the grain market. The company is trying to diversify its traffic with more bulk liquid and other more profitable cargoes.
ACL’s decision is a positive sign according to Morningstar, but fierce competition will make it difficult to control rates. The biggest competition comes from inland and coastwise operator Kirby Corp., which is nearly five times ACL’s size.
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