Rand Logistics, Inc. (NASDAQ:RLOG) (Rand), a leading provider of bulk freight shipping services throughout the Great Lakes Region, announced yesterday that American Industrial Partners (AIP) has agreed to acquire the Company.  AIP is a New York-based private equity firm with over $4.0 billion of assets under management that focuses on buying, improving and growing industrial businesses in the U.S. and Canada.

American Industrial Partners to Acquire Rand Logistics, Inc.
Caption: 26,000 DWT Self-Unloading Barge Ashtabula - Image courtesy of GRNavigation

Under the terms of the agreement entered into between Lightship Capital LLC, an affiliate of AIP, and the Company, AIP has agreed to convert all of the Company’s second lien debt into 100% of the new common equity of the reorganized Company (subject to dilution by shares to be issued under a management incentive plan). The transaction will materially de-lever the Company’s balance sheet, eliminating approximately $90 million in outstanding debt and will also dramatically reduce annual interest expense. As a result of the AIP transaction, which will be effectuated through a pre-packaged plan of reorganization, Rand will enjoy its strongest financial position in recent years.  Rand’s business will continue uninterrupted pending completion of the transaction, the terms of which provide for payment in the ordinary course of all Company vendors and other unsecured creditors.

“We are pleased that we have reached an agreement, which will allow Rand to significantly reduce its debt burden and partner with a leading private equity firm,” commented Edward Levy, President and Chief Executive Officer of Rand. Mr. Levy added, “the transaction firmly addresses Rand’s recent balance sheet challenges and positions the Company for continued customer service and growth.”

“We are thrilled to partner with Rand and its leadership team to welcome a new beginning for a clear market leader in shipping and logistics on the Great Lakes,” said Jason Perri, a Partner of AIP. “Rand’s track record of reliability, safety and service in moving critical raw materials among world class customers between ports on the Great Lakes speaks for itself.  We are pleased to help Rand reduce its debt burden and restore its financial health for the benefit of all stakeholders, especially customers and employees, and look forward to working with Rand to continue to improve its operations and broaden its capabilities as a new platform for growth under our ownership.”   

Akin Gump Strauss Hauer & Feld LLP represents the Company, and the Company is being advised by Stifel Financial and its subsidiary Miller Buckfire & Co., LLC.  White & Case LLP represents AIP, and AIP is being advised by Houlihan Lokey Capital, Inc.

Source: Rand Logistics, Inc.