Carlyle invests in US logistics company

The Carlyle Group’s $1.1bn infrastructure fund has done its second deal and joined the growing trend of private equity firms targeting the logistics space.

The Carlyle Group has acquired a majority interest in ITS Technologies & Logistics, a logistics operator based in the US, with operations in the US and Mexico. Carlyle purchased the stake for an undisclosed sum from Lanigan Holdings, a family-held collection of companies that will retain a minority interest in ITS.

The investment was made through Carlyle’s $1.1 billion Carlyle Infrastructure Partners fund, which closed in November 2007 and invests primarily in transportation and water infrastructure projects in the US and Canada. This is the second deal for the debut fund, and its first in the intermodal logistics space.

The logistics sector is “the backbone of moving commerce in the US – a lot of things come in through ports but you have to move them from ports to trucks to rail and around the country,” Barry Gold, Carlyle managing director and co-head of the infrastructure team, told sister website PrivateEquityRealEstate.com.

ITS operates from 52 locations in the US and three locations in Mexico, lifting containers from rail to truck and truck to rail and also performing rail switching, terminal administration and equipment maintenance. It performs approximately five million lifts, or intermodal units, annually.

“ITS is a great platform company to grow into the intermodal logistics space,” said Gold. “We’ll be looking at other companies, other contracts, other sites and related businesses to help grow this company.”

As trade volume continues to grow, the past year has seen a significant number of private equity firms investing in the global industrial and logistics space, such as Apollo Management, Blue River Capital, Greshem Private Equity and The Blackstone Group. According to the US Department of Transportation’s Bureau of Transportation Statistics, the value of trade by rail between the US and two other NAFTA countries, Mexico and Canada, increased 50 percent between 2000 and 2007. The value for commodities transported by truck increased nearly 40 percent over the same period.

Today global real estate investment firm LaSalle Investment Management also announced it was partnering with Realty Vailog, an Italian industrial development company, on a joint venture to acquire and develop logistics facilities in the Greater Shanghai Region of China. Once the deal is complete, LaSalle will have a total of 320,000 square meters of logistics space in the Shanghai region.