American Industrial Partners to Acquire Rand Logistics, Inc.
November 21 2017 - 9:52PM
Rand Logistics, Inc. (NASDAQ:RLOG) (“Rand” and, together with its
subsidiaries, the “Company”), a leading provider of bulk freight
shipping services throughout the Great Lakes Region, announced
today that American Industrial Partners (“AIP”) has agreed to
acquire the Company. AIP is a New York-based private equity
firm with over $4.0 billion of assets under management that focuses
on buying, improving and growing industrial businesses in the U.S.
and Canada.
Under the terms of the agreement entered into between Lightship
Capital LLC, an affiliate of AIP, and the Company, AIP has agreed
to convert all of the Company’s second lien debt into 100% of the
new common equity of the reorganized Company (subject to dilution
by shares to be issued under a management incentive plan). The
transaction will materially de-lever the Company’s balance sheet,
eliminating approximately $90 million in outstanding debt and will
also dramatically reduce annual interest expense. As a result of
the AIP transaction, which will be effectuated through a
pre-packaged plan of reorganization, Rand will enjoy its strongest
financial position in recent years. Rand’s business will
continue uninterrupted pending completion of the transaction, the
terms of which provide for payment in the ordinary course of all
Company vendors and other unsecured creditors.
“We are pleased that we have reached an agreement, which will
allow Rand to significantly reduce its debt burden and partner with
a leading private equity firm,” commented Edward Levy, President
and Chief Executive Officer of Rand. Mr. Levy added, “the
transaction firmly addresses Rand’s recent balance sheet challenges
and positions the Company for continued customer service and
growth.”
“We are thrilled to partner with Rand and its leadership
team to welcome a new beginning for a clear market leader in
shipping and logistics on the Great Lakes,” said Jason Perri,
a Partner of AIP. “Rand’s track record of reliability, safety
and service in moving critical raw materials among world class
customers between ports on the Great Lakes speaks for itself.
We are pleased to help Rand reduce its debt burden and
restore its financial health for the benefit of all stakeholders,
especially customers and employees, and look forward to working
with Rand to continue to improve its operations and broaden its
capabilities as a new platform for growth under our ownership.”
Akin Gump Strauss Hauer & Feld LLP represents the Company,
and the Company is being advised by Stifel Financial and its
subsidiary Miller Buckfire & Co., LLC. White & Case
LLP represents AIP, and AIP is being advised by Houlihan Lokey
Capital, Inc.
About Rand Logistics
Rand Logistics, Inc. is a leading provider of bulk freight
shipping services throughout the Great Lakes region. Through its
subsidiaries, the Company operates a fleet of three conventional
bulk carriers and twelve self-unloading bulk carriers including
three tug/barge units. The Company is the only carrier able to
offer significant domestic port-to-port services in both Canada and
the U.S. on the Great Lakes. The Company's vessels operate under
the U.S. Jones Act – which reserves domestic waterborne commerce to
vessels that are U.S. owned, built and crewed – and the Canada
Coasting Trade Act – which reserves domestic waterborne commerce to
Canadian registered and crewed vessels that operate between
Canadian ports.
About American Industrial Partners
American Industrial Partners is an operationally oriented
private equity firm that makes control investments in industrial
businesses serving domestic and global markets. The firm has deep
roots in the industrial economy and has been active in private
equity investing since 1989. To date, AIP has completed over 70
transactions and currently has $4.1 billion of assets under
management on behalf of leading pension, endowment and financial
institutions. For more information on AIP, visit
www.americanindustrial.com.
Forward-Looking StatementsThis
press release contains forward-looking statements which reflect
management’s current views with respect to certain future events
and Rand’s operations, performance and financial condition.
Forward-looking statements are made only as of the date of this
press release. Forward-looking statements include, but are not
limited to: Rand’s future operating or financial results; Rand’s
anticipated plans, goals or objectives of our management for
operations and services including future cost reduction
initiatives; Rand’s anticipated financial position and liquidity,
including Rand's ability to regain or remain in compliance with its
debt covenants and consummate a recapitalization transaction,
acquisition and divestiture opportunities, regulatory and
competitive outlook, investment and expenditure plans, investment
results, strategic alternatives, business strategies, and other
similar statements of expectations or objectives; and Rand’s
outlook and financial and other guidance. For all forward-looking
statements, we claim the protection of the Safe Harbor for
Forward-Looking Statements contained in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
inherently subject to risks and uncertainties, many of which cannot
be predicted with accuracy or are otherwise beyond our control and
some of which might not even be anticipated. Future events and
actual results, affecting our strategic plan as well as our
financial position, results of operations and Rand Logistics Fiscal
Year 2018 Q2 Financial Results cash flows, could differ materially
from those described in or contemplated by the forward-looking
statements.
Important factors that contribute to such risks include, but are
not limited to, the effect of any economic downturn in certain of
our markets; the weather conditions on the Great Lakes; our ability
to maintain and replace our vessels as they age; changes in
customer demand; changes in shipping regulations; fluctuations in
currencies and interest rates; changes in fuel price and fuel
surcharges; adequacy of capital resources, including the ability to
refinance or obtain financing in the future; expectations of
vessels’ useful lives and the estimated obligations, and the timing
thereof, relating to vessel repair or maintenance work; expected
capital spending or operating expenses, including dry-docking and
insurance costs; the ability to comply with or regain compliance
with applicable regulations, Nasdaq listing requirements, and our
debt covenants, including our ability to consummate a
recapitalization transaction; changes in laws, regulations or tax
rates, or the outcome of pending legislative or regulatory
initiatives; and potential liability from pending or future
litigation.
The risks included are not exhaustive. For a more detailed
description of these uncertainties and other factors, please see
the "Risk Factors" section in Rand's Annual Report on Form 10-K
filed with the Securities and Exchange Commission on July 6, 2017
and in Rand’s Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on November 14, 2017.
CONTACT:
Rand Logistics, Inc.
Corporate Communications:Annemarie Dobler(212)
863-9429annemarie.dobler@randlog.com