Tokyo-based Mitsubishi HC Capital (MHC) is buying the container leasing company CAI International.
San Francisco-based CAI is the world’s sixth largest lessor of maritime containers, with a fleet of approximately 1.7M TEU. The price of the sale is approximately US$1.1B.
The move reflects MHC’s desire to expand its presence in the container leasing sector, a market it first entered in 2014 when its predecessor Mitsubishi UFJ Lease acquired Beacon Intermodal Leasing (BIL) and which it thinks offers strong growth potential. In September 2020 Mitsubishi UFJ and Hitachi Capital established MHC.
BIL now owns about 1.8M TEU. Collectively, with a pool of 3.5M TEU, MHC overtakes Seaco Global and becomes the world’s fourth largest lessor of containers.
The latest deal involves MHC offering US$56 per share in cash for CAI, a premium of 46.8% on CAI’s last stock closing price on June 17, 2021. It also represents a 31.3% premium over the volume weighted average share price of the 60 trading days in the run up to the end of June17.
Commenting on the arrangement, CAI’s chairman of the board David Remington said: “After a review of strategic alternatives by our Board of Directors, we are pleased to reach this agreement with MHC, which we believe is in the long-term best interests of our shareholders. This merger is the culmination of discussions that started in in the fall of 2019.”
Effectively, the whole company has been broken up as last year saw CAI sell off its railcar leasing business (over 5,500 wagons) as it concluded deals with Infinity Transportation, a subsidiary of the Global Atlantic Financial Group. It also sold its logistics business to Camden (NJ)-based NFI, a privately-owned supply chain solutions provider.
It is fully expected that MHC will retain CAI’s existing management team, including Timothy Page, who was recently promoted as the new CEO and president of the company.
He believes the deal will secure CAI’s growth ambitions and also support its customers better. “The combination of CAI and MHC will allow MHC to leverage CAI’s global marketing and operational expertise, and along with MHC’s existing container investments will provide enhanced value to MHC’s container leasing customers, suppliers, employees, and other stakeholders.”
The transaction is expected to close in late Q3/early Q4 2021.