Direct ChassisLink Inc., one of the three main suppliers of marine intermodal chassis for the U.S. market, will be acquired by EQT Infrastructure II from private investment firm Littlejohn & Co., LLC under a deal announced Thursday.
Littlejohn and EQT, an infrastructure investment firm based in the Netherlands, announced that they had reached a definitive agreement for the transaction. The price was not disclosed.
DCLI owns and manages approximately 120,000 marine chassis and 90,000 domestic rail intermodal containers, and has a logistics technology platform, REZ-1. It is one of the three dominant U.S. chassis lessors, along with competitors TRAC Intermodal and Flexi-Van Leasing.
EQT specializes in investments in infrastructure operators “that have, or have the prospect of, strong, reliable, protected cash flows and significant opportunities for value creation,” according to the company’s website. The investments typically range between 50 million and 250 million euros ($56.9 million and $285 million).
Littlejohn is a private investment firm based in Greenwich, Connecticut. It acquired DCLI in 2012 from Maersk Inc., which formed the company in 2009.
Maersk’s transfer of its chassis fleet to DCLI set off a landmark change in the U.S. chassis supply model. Container lines had provided most chassis in the U.S. market since modern containerization began in 1956 as a seagoing extension of domestic trucking. In other countries, customers or truckers supply their own chassis.
After Maersk disengaged from chassis ownership, other container lines quickly followed suit in an effort to reduce costs and liability. Today the share of marine chassis owned by ocean carriers is estimated at 10 percent or less.
When Littlejohn acquired DCLI, the company had 64,000 chassis. That fleet has expanded, mainly through acquisitions of equipment previously owned by ocean carriers.
In 2014, DCLI acquired REZ-1, which provides technology for intermodal equipment management and service. DCLI has used REZ-1 technology to develop reservation and billing systems and to improve tracking, reservation, allocation and forecasting of chassis usage.
Competitors TRAC and Flexi-Van have also expanded through equipment purchases. TRAC, owned by Fortress Investment Group, has approximately 278,000 chassis. Flexi-Van, an affiliate of Castle & Cooke Inc., has more than 130,000.
Fortress, which acquired TRAC in 2007, has offered the company for sale in recent years. Earlier this year, Fortress scrapped plans for a junk-bond issuance that would have been used primarily to pay a cash dividend.
The big three chassis providers have cooperated in chassis pools in several regions, notably the ports of Los Angeles and Long Beach, where their equipment is shared by multiple pools in the port area.
Efforts to bring the three lessors together into a universal pool have stalled at the Port of New York and New Jersey, where TRAC is the dominant supplier. The lessors have been at odds with the International Longshoremen’s Association over ILA demands for a contract committing the lessors to use union mechanics.