CP Ships keeps cash “firepower” for potential takeovers

CP Ships keeps cash “firepower” for potential takeovers

CP Ships keeps cash “firepower” for potential takeovers

   CP Ships said it remains on the lookout for potential acquisitions and will keep cash for future acquisitions, after a few years of subdued takeover activities.

   “At the moment, we still consider it to be sensible to preserve some substantial firepower as we may well be entering, at some time in the next couple of years, an industry downturn,” CP Ships chairman Ray Miles told investment analysts Thursday.

   On April 1, 2004, CP Ships acquired Montreal-based ROE Logistics for $13 million. Besides this small logistics purchase, the company’s most recent carrier acquisition was that of Italia Line in 2002.

   “The company’s grown through acquisitions,” Miles noted. “That’s one reason why we want to preserve our free cash flow to take advantage of opportunities as they present themselves.” CP Ships is also considering buying more ships, but said that it is concerned about their high prices.

   Asked about the potential size of future acquisitions, Miles answered: “Size is not necessarily an issue; it depends on the nature of the transaction.”