NEW YORK Warburg Pincus LLC and Vestar Capital Partners will buy a controlling interest in container leasing company Triton Container International Ltd from the Pritzker family, one of America's wealthiest families, the private equity firms said on Thursday.
The terms of the deal were not disclosed, but a source familiar with the matter said Warburg and Vestar had agreed to pay about $1 billion for Triton. Including debt, the deal has an enterprise value of about $3.5 billion, the source said.
Triton's current management team will continue to lead the business and will hold equity in the company. Chicago's Pritzker family will also retain an equity stake in Triton.
The transaction is the latest in a series of asset sales by the Pritzkers following a 2001 settlement agreement, under which 11 heirs set a plan to break up the family fortune.
The private equity firms are buying Triton at a time of growing confidence in the global container shipping market, which has recovered from a disastrous 2009 amid the global financial crisis.
Denmark's A.P. Moller-Maersk (MAERSKb.CO), which owns the world's biggest container shipping company, Maersk Line, said earlier this week it would order 10 huge container ships from Korea's Daewoo Shipbuilding & Marine Engineering (042660.KS) for $1.9 billion and take options on 20 more vessels of a similar size to capitalize on expected growth on Asia-Europe routes.
Maersk is one of Triton's largest clients, the source said.
Bank of America Merill Lynch advised Triton, while Wells Fargo Securities, Nomura and SunTrust Robinson Humphrey advised the private equity firms.
Another container lessor, GE SeaCo, which is part owned by General Electric Co (GE.N), is also on the block, with Deutsche Bank (DBKGn.DE) advising on the sale.
That business, whose fleet is older than that of Triton and could fetch about $500 million, is likely to attract strategic buyers looking to add assets and build scale, people familiar with the matter said.
Strategic buyers could include Textainer Group Holdings (TGH.N), TAL International TAL.N and CAI International CAP.N, these people said.
Triton's auction started last summer and took an unusually long time as the Pritzker family trust proceeded carefully, the source said.
In 2006, the family sold smokeless tobacco company Conwood to Reynolds American (RAI.N) for $3.5 billion. That was followed in 2007 by the sale of 60 percent of manufacturing and services group Marmon Holdings Inc to Warren Buffett's Berkshire Hathaway Inc (BRKa.N) for $4.5 billion.
In late 2009, the family took Hyatt Hotels Corp (H.N) public. And last year, Madison Dearborn Partners bought a 51 percent interest in credit reporting company TransUnion Corp from the family.
(Reporting by Soyoung Kim and Paritosh Bansal; editing by Andre Grenon and John Wallace)