U.S. private-equity firm to buy majority ownership in Canada Cartage

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A U.S. private-equity firm has struck a deal worth more than C$140 million to acquire control of Canada Cartage. Canada Cartage Diversified Income Fund announced Thursday, May 3, that Nautic Partners VI LP, of Providence, R.I., has agreed to pay C$11.30 per unit to acquire the fund, which owns 67 percent of CCD Limited Partnership. If the deal goes through, Nautic would assume the fund’s liabilities and the fund would be wound up.

With origins dating to 1914, CCD offers transportation services that include trucking, warehousing and distribution, general cartage, logistics and moving services. CCD operates in 12 cities across Canada with a fleet of more than 1,500 trucks, 1,900 trailers and more than one million square feet in distribution and warehousing space. The Toronto-based fund said Nautic’s offer represents a 26.7 percent premium to the fund’s April 30 closing price. At that time, Canada Cartage had announced it was in advanced negotiations.

“The other partners of CCD will also sell a significant portion of their interests in CCD to the purchasers at the same C$11.30 per unit price and will continue their remaining interests in partnership with the purchasers,” the fund said. A special committee of the independent board members of CCD has unanimously recommended the transaction to the board of directors of CCD and trustees of the fund. “The board of directors unanimously supports this transaction, which offers unitholders a significant premium,” said chairman Jim McKelvie.

The deal is subject to approval by the fund’s unitholders, regulatory approvals and other closing conditions. The annual and special meeting of the fund’s unitholders previously scheduled for May 15 will be postponed until possibly late June.

Founded in 1986, Nautic Partners is a middle-market private equity firm with more than U.S. $1.8 billion of equity capital under management. Its areas of investment focus include business services, manufacturing, health care and communications.