HNA Group Company Limited (HNA) of China, a leading diversified services and integrated operations company, and Bravia Capital (Bravia) of Hong Kong, have agreed to acquire GE SeaCo, subject to customary regulatory and shareholder approvals. GE SeaCo is the fifth largest player in the global marine container leasing industry owning and managing over 870,000 20-foot equivalent units, the industry’s standard measure.
The transaction contemplates the acquisition by HNA of the 50/50 joint venture between GE Capital and SeaCo Ltd. as well as certain owned container assets of SeaCo Ltd. and GE (Genstar), currently managed by GE SeaCo. Of the USD1,048MM equity purchase price, GE will receive approximately USD500MM for their interests in the joint venture and their owned container fleet (net of certain seller transaction costs). SeaCo Ltd. will receive approximately USD528MM for their interests in the joint venture and their owned container fleet (net of certain seller transaction costs).
Established in 1998 as a joint venture between General Electric Capital Corporation and Sea Containers Ltd (since replaced by SeaCo Ltd.), GE SeaCo has operated as a stand-alone business registered in Barbados with 13 operating, sales and support offices worldwide. Its head office is in Singapore and has representatives in more than 80 countries.
Following the acquisition’s completion, GE SeaCo will operate as a core business within HNA’s existing logistics and finance businesses. GE SeaCo’s key managers will remain with the company.
"This acquisition fits precisely into HNA’s strategic plans to quickly grow our logistics and transport business," says Adam Tan, Executive Director of HNA. "Our company currently owns and operates China’s fourth largest port, a fleet of 30 container ships and a container ship finance arm. GE SeaCo fills an important gap critical to our ongoing growth. We believe this is a tremendous opportunity for HNA to acquire one of General Electric’s world class businesses."
The acquisition aligns with HNA/Bravia’s strategy of acquiring top-tier, asset-heavy businesses within the transportation, logistics and infrastructure sectors. GE SeaCo offers an unparalleled range of marine containers for every use, including refrigerated and temperature controlled units, tanks, standard dry freight boxes, swapbodies and the two-pallet wide SeaCell. The new owner intends to increase the size of GE SeaCo significantly over the 18 to 24 months following the acquisition.
Bharat Bhise (pictured), CEO of Bravia Capital, says: "This is an exciting acquisition that comes at a time when the global growth in marine container demand continues to grow on a long-term basis. Our investment in GE SeaCo is the latest of several successful shipping and aviation acquisitions over the past 18 months, and reinforces our position as a leader in transportation and logistics investments worldwide. GE SeaCo will be at the forefront of this growth."
The acquisition is being funded by a combination of equity and debt. HNA and Bravia have arranged a committed debt facility through Deutsche Bank and ING. Deutsche Bank Securities Inc. served as sole M&A advisor to the sellers in this transaction.
GE SeaCo Chairman and acting CEO David G Amble, a GE executive who will continue as CEO for the Company said: "It is an honour for the company to become part of HNA as it continues its strategic growth in transport and logistics. The GE SeaCo team has been impressed by HNA’s commitment and vision. This transaction is an attractive one not only for the sellers, but also GE SeaCo management and our customers. The company and our employees are excited about the future as we grow in Asia and around the world."
