By Leo Ryan, Editor
Montreal’s LOGISTEC Corporation, a crown jewel of Canada’s maritime industry founded by prominent Quebec entrepreneur Roger Paquin in 1952, is being sold for approximately $1.2 billion to U.S. investment firms Blue Wolf Capital Partners and Stonepeak.
The deal marks the end of seven decades of Paquin family control over an enterprise that in recent years has built up a substantial environmental services business in addition to expanding its core network of 90 terminals in 60 ports today stretching from the St. Lawrence to the Great lakes, U.S. eastern seaboard and the Gulf Coast.
New York-based Blue Wolf and Stonepeak are purchasing LOGISTEC through a co-owned fund for $67 per share under an Arrangement Agreement. This represents a premium of 17% compared with last Friday’s close on the stock exchange and 53% premium versus the share price prior to the announcement last May 19 of what was called “a strategic review process.”
“Since my father started this business more than 70 years ago, we have grown into industry leaders,” said Madeleine Paquin, President and Chief Executive Officer of LOGISTEC..
“As we enter this next phase of our journey, we will continue to build a sustainable future by facilitating trade, handling our customers’ goods safely, and protecting our environment as well as our water resources for the next generation.
“We see significant opportunity to collaborate with Blue Wolf to drive value creation for our people, our customers, and our communities while rewarding our existing shareholders with an attractive cash consideration providing immediate and fair value for their shares.”
Through the years, LOGISTEC has an impressive track record of steady growth and constant profits. In fiscal 2022, the company reported record revenues of $897.6 million – an increase of 20.7% over 2021. Profit amounted to $54 million.
Current management remains in place
The transaction, which is slated to close in first-quarter 2024, will take LOGISTEC private and ensures that the company will remain headquartered in Quebec. Blue Wolf and Stonepeak have pledged to invest more than $200 million in capital expenditures and “growth initiatives.”
Current management teams are to remain place, they also indicated.
LOGISTEC accepted the offer from the U.S. investment firms that was reportedly deemed superior to an offer submitted by a Quebec business partner with the Caisse de depot, the Quebec pension fund that presently holds a 10% stake in LOGISTEC.
For its part, the Quebec government is in discussion with Blue Wolf to purchase a potential stake in LOGISTEC, Guy LeBlanc, president and CEO of Investissement Québec, the province’s investment arm, said in a news release.
The Arrangement Agreement is the culmination of an extensive and robust review of strategic alternatives available to maximize shareholder value that was conducted by a Special Committee of independent directors of the Corporation at the request of its principal shareholder, Sumanic Investments Inc., LOGISTEC said in a press release.
“Blue Wolf is excited to enter the Québec market with this acquisition, which represents excellent prospects for continued growth for both of the Corporation’s business segments and throughout North America,” commented Bennet Grill, Principal at Blue Wolf.
Natalie Marjancik, Partner at Blue Wolf, added, “We are committed to maintaining LOGISTEC’s core values of quality and innovative services, respect for people and the environment. We look forward to continued growth and working alongside the current management teams in place in Québec and elsewhere.”
“The specialized services LOGISTEC provides through its terminal operations to a diversified global customer base make it a quality infrastructure asset,” said James Wyper, Senior Managing Director at Stonepeak. “Between its Marine Services and Environmental Services business, which is focused on rehabilitating aging water infrastructure and remediating soil, we believe in the compelling opportunities for growth and in the future success of LOGISTEC. We are excited to support the Corporation, in partnership with Blue Wolf, in its next chapter.”
(Logistec photos of Madeleine Paquin and big terminal at Port of Hamilton)
