Triton Container International and TAL International Group have agreed to a merger, creating the world’s largest lessor of intermodal shipping containers with a combined fleet of nearly 5 million 20-foot equivalent units and revenue earning assets of $8.7 billion.
The move comes as demand for international shipping containers softens and falling prices for used containers crimp profits of leasing companies.
Under terms of a definitive agreement announced Nov. 9, Triton shareholders will own 55% of the equity in a new publicly owned company, called Triton International Ltd., with TAL shareholders controlling the remaining 45%. TAL shareholders also will receive a special dividend of 54 cents a share when the transaction closes.
Triton, based in Bermuda, is owned by private equity firms Warburg Pincus and Vestar Capital Partners along with other private investors and members of Triton management. The company operates a container fleet of 2.4 million TEUs and has offices in 13 countries.
TAL, headquartered in Purchase, New York, has been in business since 1963. It also operates a container fleet of 2.4 million TEUs and has offices in 11 countries.
“This transaction will create a company with deep industry knowledge, enhanced operating and systems capabilities, and expanded fleet size,” said Ed Schneider, co-founder and chairman of Triton.
TAL International CEO Brian Sondey said the deal is “transformational” and would put the company in a better position to weather the current soft market conditions and provide “valuable operating leverage when the market recovers.”
The combined company expects to save $40 million in annual expense by the end of 2016, company officials said.
Leasing revenue for the combined companies for the 12 months ended Sept. 30 is $1.3 billion.
Sondey will serve as CEO of the combined company with Triton CEO Simon Vernon serving as president. Schneider said he will retire once the transaction is concluded.
Other major container leasing companies include Textainer Group Holdings, a publicly owned company based in Bermuda with a container fleet of 3.2 million TEUs; Florens Container Services, Hong Kong, with a container fleet of 1.8 million TEUs; SeaCo, New York City, with a container fleet of 1.3 million TEUs; SeaCube Container Leasing, Park Ridge, New Jersey, with a container fleet of 1.2 million TEUs; CAI International Inc., San Francisco, with a container fleet of 1.2 million TEUs.; and Beacon Intermodal Leasing, Boston, with a container fleet of 575,000 TEUs.