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Horizon Lines sells out to Matson and Pasha

Horizon Lines sells out to Matson and Pasha
Horizon Lines is selling its Alaska business to Matson in a $456.1m deal, its Hawaii operations to The Pasha Group for $141.5m and closing down its Puerto Rico liner operations.

Matson will acquire all the outstanding stock in Horizon Lines for $0.72 per share, a total of $69.2m, plus all the outstanding debt of the company at closing valuing the deal at $456.1m in total.

In a separate deal Pasha will acquire Horizon Lines Hawaii trade lane business for $141.5m in cash prior to the closing of the Matson deal. The proceeds from the sale to Pasha will be used to reduce Horizon Lines’ debt prior to the closing of the Matson deal.

"The acquisition of Horizon's Alaska operations is a rare opportunity to substantially grow our Jones Act business," said Matt Cox, president and ceo of Matson. "Horizon's Alaska business represents a natural geographic extension of our platform as a leader serving our customers in the Pacific.

Commenting on the two deals Horizon Lines chairman David Weinstein said: "These transactions will place our company in the hands of strong stewards with reputations for outstanding customer service. Matson has over 130 years of shipping experience and is guided by a rich history of integrity and innovation.

"Pasha is a third generation, family-owned business with a proud heritage of excellence and deep ties to the Hawaiian community," he added.

At the same time as the sale of Horizon Lines the company will be closing down its historic Puerto Rico service by the end of 2014.

"We have a 56-year history in the Puerto Rico trade and truly value the relationships we have established," said Steve Rubin, president and ceo of Horizon Lines.  "Unfortunately, a combination of factors, including uncertain prospects for the Puerto Rican economy, losses over recent years and more expected going forward, aging ships that we cannot afford to continue to maintain or replace, and upcoming large capacity additions by two other carriers has led to this difficult but prudent and necessary decision."

The closing down of the service is expected to result in restructuring charges of $90m to $100m.

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