Containership owner and operator Seaspan Corporation announced it has acquired Greater China Intermodal Investments LLC (GCI) from affiliates of The Carlyle Group and other minority owners.
Seaspan, which previously held 11 percent of GCI and operated the company’s container vessel fleet, will take over GCI’s 16 on the water 10,000-14,000 TEU containerships plus two newbuilds scheduled for delivery during Q2 2018. All 18 vessels sister ships to Seaspan’s current fleet.
“With GCI’s fleet now under our ownership, we are strengthening our partnerships with customers and enhancing our scalable integrated platform for sustained growth and future consolidation,” said Bing Chen, Seaspan president and CEO. “As the container shipping industry is beginning to show signs of a recovery, we are taking decisive actions to capitalize on compelling opportunities in our market."
GCI was formed between The Carlyle Group, Seaspan, Tiger Group and the Washington family as a joint venture focused on the Greater China and Asian markets.
Seaspan said the implied enterprise value of GCI is approximately $1.6 billion, including assumed third party net debt of approximately $1 billion and $140 million of future vessel payments.
GCI’s current fleet will contribute approximately $1.3 billion toward Seaspan’s contracted future revenues, increasing Seaspan’s total contracted future revenues to approximately $5.6 billion, the company said. In calendar year 2019, with an 18 vessel fleet, Seaspan expects GCI to generate $185 million to $200 million in annual EBITDA.
The consideration to selling shareholders will be approximately $330 million cash and a $50 million issuance of Seaspan Series D preferred shares. Seaspan financed the cash consideration from its balance sheet, $16 million from the Washington family in Seaspan common equity and a $100 million secured credit facility from Citi.
Fairfax Financial Holdings Limited will invest an additional $250 million in 5.5 percent debentures and warrants, increasing its total investment in Seaspan to $500 million.