Posted on November 2, 2022
Three months after proposing a deal to buy the remaining stock of Atlas Corporation, an investment group that includes the company’s chairman, largest investors, and Japan’s Ocean Network Express (ONE) have agreed to terms to take the company private. The all-cash transaction values the parent company of Seaspan, the largest owner-lessor containerships to the industry’s major carriers, at $10.9 billion.
“We are pleased to have reached this agreement which, through the combination with Poseidon, introduces Atlas to an important corporate sponsor in the form of ONE,” said Nicholas Pitts-Tucker, Chair of the Special Committee of the Board of Atlas. As of mid-2022, Seaspan reported that ONE was its largest customer chartering a quarter of the company’s container capacity, having replaced COSCO which had been Seaspan’s largest customer. ONE has previously discussed with its investors plans for expansion including building its first directly-owned containerships.
Under the terms of the agreement, the investment group called Poseidon Acquisition Corp. will acquire all outstanding common shares of Atlas that they do not own for a cash price of $15.50 per share. The per share purchase price represents a 34 percent premium to Atlas’ share price prior to the announcement of the acquisition offer. After the transaction closes, Atlas’ preferred shares will continue to trade on the NYSE.
The investment group includes Fairfax Financial Holdings, certain affiliates of the Washington Family, and David Sokol, the current Chairman of the Board of Atlas. Collectively, they currently own approximately 68 percent of the outstanding common shares of Atlas, with Fairfax being the largest investor with approximately 47 percent of the company. After the transaction is completed, Bing Chen, the current president and CEO of Atlas will contribute his equity in Atlas to become an owner of the company along with Poseidon. He will continue to serve as President and CEO of Atlas.
Atlas’s largest holding is Seaspan. Starting in late 2020, Seaspan announced multiple long-term charter agreements as part of its effort to expand its fleet while the company recently sold older, smaller vessels. The company reports it forward fixed 14 vessels last quarter on charter extensions, while newly delivered containerships will begin operating on 5-year charters.
Seaspan as of September 2022 owns 127 vessels and operates an additional eight for other owners. Under its current newbuilding program, the company recently took delivery on three 11,800 TEU containerships and the first of a new series of 15,000 TEU vessels, while it has an additional 61 vessels on order. Seaspan is targeting a fleet of 190 owned vessels and eight more under management by 2024 with a capacity of approximately 2 million TEU as it continues to work with the largest shipping companies including MSC, Zim, COSCO, Yang Ming, and others in addition to ONE. Over the past 17 years, Seaspan reports it has successfully delivered 121 newly built containerships.
“As we look at the industry’s trajectory, we believe the financial, operational, and strategic flexibility we will gain as a privately held company with this group of owners and investors will position Atlas, our employees, and customers for greater opportunity,” said Chen. I look forward to continuing to work with David and the rest of the Atlas team as we continue our progress, including preparing for the launch of our new vessel fleet, which we expect to be fully delivered by 2024.”
Atlas also owns APR, a provider of mobile gas turbines. The company currently has approximately 850 MW and a strategic focus on providing power support to utilities during emergencies as well as remote locations seeking quick solutions for additional generating capacity.