Montréal, Québec, March 2, 2023 – LOGISTEC Stevedoring Inc., a subsidiary of LOGISTEC Corporation (TSX: LGT.A and LGT.B), ("LOGISTEC"), a leading North American marine and environmental services provider, announced today that it has entered into a definitive agreement to acquire the Canadian and U.S. marine terminal business of Fednav, including Federal Marine Terminals, Inc. and the logistics division, Fednav Direct (collectively, "FMT"), for a purchase price of US$105 million, subject to customary adjustments. This transaction will allow LOGISTEC to strengthen its presence in Canada and the United States and add specialized expertise to its service offering.
FMT has operated terminal facilities at ports in Canada and the United States for over five decades. Recognized as an industry leader in marine terminal operations, it provides stevedoring, handling and warehousing services for bulk, containerized, project cargo, and general cargo. FMT also offers value-added on-carriage services, inventory management, and 24/7 inland cargo transportation in Canada and the United States. For the year ended December 31, 2022, FMT generated revenue of US$89.8 million (approximately CA$116.8 million) with gross margins comparable to LOGISTEC’s marine segment.
The addition of 11 terminals represents a major expansion of LOGISTEC's network, bringing its total to 90 terminals in 60 ports across North America. The combined network will provide strategic gateways for existing and future customers, allowing LOGISTEC to gain an important foothold in the Great Lakes region and access prime locations in the U.S. Gulf and East Coast regions.
"We are delighted to welcome FMT to continue to grow together across Canada and the USA," said Madeleine Paquin, President and CEO of LOGISTEC. LOGISTEC and FMT have had a long-standing business relationship for decades and joining forces is a natural fit, as we share the same values. The combined capabilities and expertise of both organizations will create solid synergies to deliver operational excellence to marine shippers across North America."
"LOGISTEC, a company with cargo handling as its core business, will ensure FMT's ongoing success and growth, stated Paul Pathy, Fednav's CEO and President. In the coming years, Fednav will focus on its pure-play shipping business and continue its expansion journey. Known to innovate and provide the highest standard of service for over 75 years, Fednav has an exciting new chapter ahead."
"As part of LOGISTEC's ambitious strategic plan to expand its marine services both geographically and operationally, this acquisition will allow us to gain a footprint in new markets in Canada and the USA," added Rodney Corrigan, President of LOGISTEC Stevedoring Inc. "Our customers will benefit from a large and efficient network, as well as strong expertise from the FMT team, and together, we will continue to offer quality service to contribute to a safe, reliable supply chain."
LOGISTEC will benefit from FMT's solid reputation for excellence in marine terminal operations and a team that is well-trained and safety-oriented, using modern equipment to ensure quality services for its customers.
The transaction is expected to close on or about March 31, 2023, subject to customary closing conditions. The transaction will be financed via an increased CA$450 million revolving credit facility, which has been fully underwritten by BMO Bank of Montréal and TD Securities.
TD Securities is acting as sole financial advisor to LOGISTEC in connection with the transaction and Fasken is LOGISTEC's legal counsel.
LOGISTEC Forward-Looking Statements
This press release contains forward-looking statements, within the meaning of securities legislation, about LOGISTEC's (the “Company”) activities, performance and financial position and, in particular, hopes for the success of the Company's efforts in the development and growth of its business, including the anticipated benefits of the transaction and the expected timing of closing of the transaction. These forward-looking statements express, as of the date of this document, the estimates, predictions, projections, expectations, or opinions of the Company about future events or results. Although the Company believes that the expectations produced by these forward-looking statements are founded on valid and reasonable bases and assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many of which are beyond the Company's control, such that the Company's performance may differ significantly from the predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed include failure to satisfy closing conditions in a timely manner or at all, failure to meet the expected timing of closing of the transaction, failure to complete the transaction for any reason, failure to realize the anticipated benefits of the transaction, as well those examined under business risks in the Company's 2021 annual report, including (but are not limited to) the impact of the COVID-19 pandemic on the Company's business and results of operations, the performances of domestic and international economies and their effect on shipping volumes, weather conditions, labour relations, pricing, and competitors' marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required by law.
Fednav is a privately owned shipping company and Canada's largest international dry-bulk shipping group. It operates a modern fleet of about 120 bulk carriers trading worldwide, of which about 60 are owned. Headquartered in Montréal (QC), Fednav employs about 300 office staff and maintains commercial offices worldwide.
Federal Marine Terminals (FMT), the Canadian and U.S. marine terminal division of Fednav, has been delivering customized cargo handling services since 1961. It is recognized as an industry leader in marine terminal operations at ports in the United States and Canada. Fednav Direct offers value-added on-carriage services, inventory management, and 24/7 inland transportation of cargoes throughout the US and Canada.
LOGISTEC Corporation is based in Montréal (QC) and provides specialized services to the marine community and industrial companies in the areas of bulk, break-bulk and container cargo handling in 53 ports and 79 terminals located in North America. LOGISTEC Corporation also offers marine transportation services geared primarily to the Arctic coastal trade as well as marine agency services to shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental industry where it provides services to industrial, municipal and other governmental customers for the renewal of underground water mains, dredging, dewatering, contaminated soils and materials management, site remediation, risk assessment, and manufacturing of fluid transportation products. More information can be obtained on the Company's website at www.logistec.com.
For further information:
Carl Delisle, CPA, Auditor
Chief Financial Officer
Phone: (514) 709-8822
Vice-President, Strategy and Communications
Phone: (514) 985-2337
Senior Manager, Communications
Phone: (514) 878-6403