In a significant development for the global container leasing industry, Textainer Group Holdings Limited, a company with strong ties to South Africa, has announced its acquisition by Stonepeak, a leading alternative investment firm. The deal is set to be valued at approximately $7.4 billion, with Textainer’s shareholders to receive $50.00 per share in cash.
Textainer, a Bermuda-incorporated company, has a unique South African connection as it is dual-listed on both the New York Stock Exchange (NYSE) and the Johannesburg Stock Exchange (JSE). South African shareholders have been active participants in Textainer’s journey since it became a publicly traded company in 2007 under the JSE share code ‘TXT’.
Under the terms of the agreement, shareholders of Textainer, including those on the JSE, are set to receive this cash payout, a development that is sure to be welcomed by many investors. The per-share consideration paid to JSE shareholders will be in South African Rand, with the exchange rate determined in accordance with the merger agreement.
Textainer, founded in 1979, is one of the world’s largest lessors of intermodal containers, owning and managing a fleet of over 4 million twenty-foot equivalent units (TEUs). They lease containers to approximately 200 customers, including major international shipping lines and other lessees.
This acquisition by Stonepeak marks a pivotal moment in Textainer’s history, transforming it from a publicly traded entity to a privately held company. As Olivier Ghesquiere, President and Chief Executive Officer of Textainer, noted, “After 16 years of operating in the public equity markets, we are very excited to start this new chapter as a private company.”
The acquisition represents a significant premium for Textainer’s common shareholders, with a 46% premium over the closing share price on October 20, 2023, the last trading day before the announcement.
The $7.4 billion deal includes the redemption of Textainer’s Series A and B cumulative redeemable perpetual preference shares. This strategic move is anticipated to strengthen Textainer’s position and allow it to benefit from Stonepeak’s investment capital and industry expertise, positioning the company for continued growth.
James Wyper, Senior Managing Director at Stonepeak, highlighted the appeal of Textainer’s business, saying, “Textainer forms a critical link in global trade. The business is underpinned by high-quality assets and contracted cash flows that provide substantial downside protection and resilient through-cycle performance.”
The acquisition reflects the success of Textainer’s strategy and positive momentum in the business. With Stonepeak’s experienced support, Textainer is well-positioned to continue delivering high-quality equipment and services to customers worldwide.
Here’s a table summarizing the key financial details of the acquisition:
| Description | Amount (USD) |
|---|---|
| Total Enterprise Value | $7.4 billion |
| Common Shareholder Payout | $50.00 per share |
| Premium Over Share Price | 46% |
This acquisition is not contingent on financing and is expected to close in the first quarter of 2024, subject to customary closing conditions, approval by Textainer shareholders, and the receipt of required regulatory clearances and approvals.
The definitive merger agreement includes a 30-day “go-shop” period until November 22, 2023, allowing Textainer and its financial advisor to actively solicit and consider alternative acquisition proposals. This offers an opportunity for potentially superior proposals to emerge, although there is no guarantee of such an outcome.
For South African shareholders, this acquisition will have implications. While the company plans to maintain its current quarterly dividend on both common and preference shares until closing, it’s important to note that Textainer’s Series A and B cumulative redeemable perpetual preference shares will be called for redemption following the transaction’s completion.
After the acquisition, Textainer common shares will no longer be listed on the New York Stock Exchange and Johannesburg Stock Exchange.
Experts in the financial industry see this acquisition as a strategic move with the potential to enhance Textainer’s growth and financial stability. South African investors who have been part of Textainer’s journey will likely be keeping a keen eye on how the deal unfolds.
The acquisition comes with its share of risks and uncertainties, as highlighted in the cautionary statement regarding forward-looking statements. These include risks related to the satisfaction of closing conditions, the realization of anticipated benefits, potential disruptions, availability of capital, and market conditions.
Investors and shareholders are encouraged to review these risks carefully when considering the potential impact of the acquisition on their investments.
The acquisition of Textainer by Stonepeak marks a significant development in the container leasing industry and has particular relevance for South African shareholders due to Textainer’s dual listing on the JSE. As the deal progresses and the 30-day “go-shop” period unfolds, it remains to be seen how this acquisition will impact Textainer, its shareholders, and the industry as a whole. South African investors, in particular, will be watching closely as this exciting chapter unfolds.
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