CSX to Convey CSX Lines for $300 Million to Carlyle Group

By: Bubbajunk.com

CSX Corp. announced that it has reached an agreement to convey its domestic container shipping unit, CSX Lines, LLC, to a venture formed with The Carlyle Group for approximately $300 million in cash and securities. The transaction is subject to customary conditions, and regulatory approvals.

CSX Corp. will receive $240 million in cash and $60 million of securities issued by the venture. CSX has the potential to gain additional value if certain financial targets are met.

Michael J. Ward, CSX president, said, This is a terrific transaction for all parties. Completion of this transaction is consistent with our long-stated strategy of becoming a more rail-based organization, strengthens our balance sheet and provides shareholders with significant value.

We are very pleased to have a continuing interest in this fine company, Ward added. In a few short years Chuck Raymond and his outstanding management team have done a great job strengthening CSX Lines competitive position in its Alaska, Hawaii, Puerto Rico and Guam markets, building a solid reputation for excellent performance and innovative customer service. All of us at CSX wish Chuck and his organization much success in this new venture, he said.

Carlyle Managing Director Greg Ledford said, CSX Lines is a well-managed company that has a bright future. We look forward to working with Chuck Raymond and his seasoned team in the coming years to further unlock CSX Lines great potential. CSX Lines complements Carlyles growing transportation portfolio.

Current CSX Lines President and CEO Charles G. (Chuck) Raymond and his management team will remain in place for the Charlotte, N.C.-based ocean carrier, which will be renamed Horizon Lines, LLC. Raymond also will chair the board of directors of the company.

We are excited about working with The Carlyle Group and benefiting from its transportation experience and financial expertise and support. We expect to grow profitably and maintain our position as the nations largest and most successful ocean shipping company, Raymond said. CSX Lines serves Alaska, Hawaii, Puerto Rico and Guam.

Credit Suisse First Boston Corporation and Wachtell, Lipton, Rosen & Katz advised CSX Corporation on this transaction.

About The Carlyle Group
The Carlyle Group is a global private equity firm with more than $13.9 billion under management. Carlyle generates extraordinary returns for its investors by employing a conservative, proven, and disciplined approach. Carlyle invests in buyouts, real estate, high yield, and venture in the United States, Europe, Japan, and Asia, focusing on aerospace and defense, consumer, industrial, energy, healthcare, technology, and telecommunications and media. Since 1987, the firm has invested $7.2 billion and achieved a realized internal rate of return of 36 percent. The Carlyle Group employs 510 people in 21 offices in 11 countries.