Wednesday, November 26, 2008

Cronos seeking buyer for equity stake, source says

Cronos, a privately held container leasing company based in San Francisco, is seeking buyers for an equity stake in the company, according to a source familiar with the situation. It is also contemplating a public listing in 2009 and has not hired financial or legal advisors.
The company wants to find a buyer for the interest now primarily owned by BNP Paribas, the source said. Cronos was taken private in a management buyout last year for approximately USD 133.7m, and is currently 37%-owned by five members of management. The rest of Cronos was sold to Fortis, which in recent months was partially nationalized and partially sold to BNP Paribas.
Cronos may sell at least a 49% equity stake to an outside investor, and could lever up to 1.6x EBITDA, the source said. The size of the investment could range from USD 30m to USD 60m, and Cronos would prefer an investor with an 18 to 24 month horizon. The person said the investment could offer a double digit IRR in two years.
Potential buyers will likely be located outside the US, and could include a large German bank or an infrastructure firm, the source said.
The company ultimately aims to list on an Asian exchange, preferably Singapore, in mid to late 2009, and later do a secondary listing in Hong Kong.
Cronos would hire a firm like Macquarie or a bank familiar with the Asian markets to advise on a public offering. It works with a local law firm in San Francisco and has informal contacts at Proskauer Rose in New York. 
Cronos provides intermodal marine container leasing services, supplying dry cargo, refrigerated and tank containers. Its containers are about 25% generic and 75% specialized, or designed around specific cargo. Its customers include major agricultural and chemical companies.
It manages 800 cost-equivalent units (CEU), generates USD 160m in revenues per year and has 80 employees globally, the person said. Its competitors include three listed companies: Textainer, based in Bermuda, TAL, based in New York, and CAI International, based in San Francisco. 


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