Deal will expand Trailer Bridge fleet

Deal will expand Trailer Bridge fleet

Trailer Bridge, Inc. on Wednesday announced that it has entered into a definitive agreement to purchase Kadampanattu Corp. (K. Corp.) for $32 million.

K. Corp., controlled by the estate of Malcom P. McLean, the founder of Trailer Bridge, operates two 736-foot triple-deck roll-on, roll-off barges with a capacity equivalent to 405 53-foot trailers. Trailer Bridge, based in Jacksonville, said in a news release that the unpowered barges were built in 1984 and lengthened in 1996, and are believed to be among the largest non-self propelled vessels in the world.

Completion of the transaction is subject to Trailer Bridge obtaining sufficient financing and the consent of various parties. The terms of the agreement expire if the sale is not closed by the end of this year.

Trailer Bridge said the acquisition will boost its pretax income by approximately $4 million to $5 million per year. K. Corp.

K. Corp. currently charters two vessels to Trailer Bridge for $7.3 million per year until 2010. After the deal closes, Trailer Bridge will take ownership of the two vessels and replace the long-term charterhire expenses with lesser amounts of depreciation and interest.

K. Corp. also holds $24 million of non-convertible Series B preferred stock issued in 2002. The closing of the transaction will create savings through the cancellation of this stock and its related annual dividend, whose current annual rate of accrual is approximately $1.4 million.