Railcar lessor GATX (NYSE: GATX) is selling its dry bulk vessel business segment, American Steamship Company (ASC), to Rand Logistics.
Rand will buy ASC for $260 million, pending regulatory approval and customary closing conditions, both companies said Monday. The net sales proceeds will reduce GATX’s new debt issuance in 2020, GATX said.
ASC transports bulk commodities such as iron ore, coal and limestone on the Great Lakes. The self-unloading vessels range in length from 635 feet to 1,000 feet, with single-trip capacity ranging from 24,000 to 81,000 gross tons. The vessels operate 24 hours a day and seven days a week, with unloading speeds of 7,000 to 10,000 net tons per hour.
ASC profits in 2019 totaled $46.1 million, which includes a one-time gain of $10.5 million. ASC’s assets represented 3.5% of GATX’s total assets as of Dec. 31.
“As a leading operator of self-unloading vessels on the Great Lakes, ASC has been a strong contributor for GATX since 1973,” said Brian A. Kenney, president and chief executive officer of GATX. “This sale allows GATX to focus on our core franchises in global railcar and aircraft spare engine leasing.”
Rand, which describes itself as a marine bulk freight shipper operating in the Great Lakes region, already has a fleet of 11 self-unloading bulk carriers and three conventional bulk carriers through its subsidiaries. Headquartered in Jersey City, New Jersey, the company offers port-to-port services in both Canada and the U.S.
Rand said the acquisition of ASC’s assets will enable it to serve “different and highly complementary markets.”
“We are excited about this transformative combination of two leading vessel operators on the Great Lakes. This strategic union will create significant additional shipping capacity through network efficiencies and repositioning of the respective fleets, all of which will allow the resulting company to further improve its customer service and offer additional flexibility and shipping capacity to its customer base,” said Rand CEO Peter Coxon.