A Large Piece of America’s Supply Chain was Just Bought by Eastern Sovereign Wealth Funds and OMERS
Posted on 06/27/2022
Singapore’s GIC Private Limited, OMERS Infrastructure, and Wren House, the infrastructure sovereign wealth enterprise of the Kuwait Investment Authority, have announced the signing of an agreement to jointly acquire Direct ChassisLink Inc. (DCLI) from investment funds managed by Apollo Global Management, LLC and EQT Infrastructure. DCLI is a chassis provider in the U.S., enabling over-the-road transportation of containerized freight to and from ports, railyards, and customer locations. The closing of the transaction is expected in the second half of 2022, subject to customary closing conditions, including regulatory approvals.
DCLI is one of the largest chassis lessors in the U.S. With over 151,000 marine and 100,000 domestic chassis in its fleet, DCLI operates out of strategic locations across key port and rail terminals in the U.S. DCLI is headquartered in Charlotte, North Carolina, and employs approximately 410 employees. Chassis are the steel frames on which trucks carry shipping containers. Chassis are an essential part of the transportation value chain and are used to carry containers between ships in port and local destinations, as well as to and from intermodal hubs for long haul transport by rail or truck. DCLI is a major player and its falling into the hands of sovereign funds and OMERS. DCLI’s customers consist primarily of container shipping companies, railroads, motor carriers, beneficial cargo owners, and other logistics companies who use DCLI’s chassis under long-term contracts. Will the new sovereign wealth owners seek higher prices for upcoming long-term contracts?
Backstory
Littlejohn & Co. carved Direct ChassisLink out of Danish shipping giant Maersk in 2012, and then sold it to EQT Infrastructure in 2016. In 2017, Direct ChassisLink acquired a fleet of approximately 73,000 domestic chassis from TRAC Intermodal. On March 7, 2019, funds managed by affiliates of Apollo Global Management acquired Direct ChassisLink and Blume Global, Inc. from EQT Infrastructure (EQT Infrastructure II and EQT Infrastructure III funds) for around US$ 2.5 billion including debt. EQT Infrastructure had retained a 20% stake in DCLI and Blume Global. Blume Global allows Direct ChassisLink customers to use a single information technology platform for reservations, tracking, and billing of both chassis and containers. Likely when it came to selling DCLI, Apollo was looking at rough U.S. IPO markets and opted to satisfy the hunger of sovereign wealth funds’ appetite for U.S. infrastructure assets.
Advisors on GIC, OMERS, and Wren House Deal
Sidley Austin LLP represented GIC, OMERS Infrastructure, and Wren Hous on the deal. Those team members at Sidley include: Christopher Barbuto, Cliff Vrielink, Angela Fontana, and Herschel Hamner. Dechert represented GIC.
Keywords: Apollo Management, EQT Partners AB.