Wind Point Partners will acquire the Kearny, N.J.-based asset-light third-party logistics provider for an undisclosed sum as it attempts to expand its portfolio of transportation and supply chain services companies in the United States.
Private equity firm Wind Point Partners has agreed to purchase St. George Logistics in a bid to expand its portfolio of transportation and supply chain services companies in the United States, according to a statement from the company.
Chicago, Ill.-based Wind Point will acquire the asset-light third-party logistics and outsourced ocean container freight station (CFS) and airfreight CFS services provider via a new holding company that will be headed by industry veterans Chris Jamroz and Hessel Verhage. Financial details of the deal were not disclosed.
New Chief Executive Officer Jamroz previously served as president and chief operating officer of GardaWorld Cash Services, a logistics provider and subsidiary of GardaWorld Security Corp. specializing in the transportation of hard currency.
The company brought in Verhage, who was head of freight forwarding at UTi Wordwide Inc. prior to its purchase by Danish 3PL DSV A/S, to serve as chief operating officer.
Headquartered in Kearny, N.J., St. George Logistics generates about $150 million in annual revenues. The 3PL operates a total of 2.2 million square feet of CFS space in 15 port and inland freight facilities throughout North America, as well as having access a network of 66 facilities run by partners. Freight forwarders and logistics providers use CFSs to consolidate international less-than-containerload cargoes prior to being loaded onto containerships.
In a similar move in 2014, Wind Point, which has a portfolio that also includes manufacturers of consumer and industrial products, invested an undisclosed amount for a majority stake in Montreal, Quebec-based LTL and truckload service provider Dicom Transportation Group. At the time, Dicom produced around $175 million in sales each year, a number that has since grown to $400 million, according to Wind Point Principal Konrad Salaber.
“Container rates for transport via ocean liners continue to be extremely low… However there are signs of hope emerging,” Salaber reportedly told Wall Street Journal. “Asia-Europe rates have begun to increase and they are considered a leading indicator for general rates on pan-Pacific and other key trading lanes.”
The ocean shipping industry has been suffering in the past few years from continued depressed rates caused by excess capacity. Despite the current bleak outlook, London-based shipping consultant said last week that the rates being negotiated are not sustainable because carriers are losing money and as a result, should increase in the near future.
The surplus capacity “will contain the speed and quantum of future rate increases…they will not double or triple, but they will certainly go up,” said Drewry.
Any increase in ocean shipping volumes and rates would be welcome news, not just for the carriers but for firm like St. George Logistics as well, since their CFS revenues are tied directly to the success or failure of the container shipping industry.
The company also has previous investments in Railworks Corporation and AIR-serv Group and expects St. George Logistics to be the first acquisition of many in the development of a logistics platform providing import/export and value-added warehousing and distribution services to its customers.
Financing for the transaction was provided by NewStar Financial, Fifth Third Bank, Sun Life Assurance Company of Canada, and Oaktree Capital Management. Kirkland & Ellis represented Wind Point as legal counsel and KPMG provided transaction advisory services on the transaction.
Private equity firm purchases St. George Logistics
