Centerbridge unveils first deal

In its first ever deal, the Blackstone and Angelo Gordon spin-out has agreed to take part in a $1.2bn buyout from which General Atlantic recently withdrew.

New York-based Centerbridge Capital Partners will back the $1.2 billion (€908 million) acquisition of EGL, a Houston-headquartered transportation and logistics company.

Led by the former head of The Blackstone Group’s private equity programme, Mark Gallogly, and a former distressed securities expert from hedge fund Angelo Gordon, Jeffrey Aronson, Centerbridge closed its debut fund in September on $3 billion, making it among the largest first-time funds ever raised.

Its investment in EGL – along with equity from EGL’s founder Jim Crane, senior members of EGL’s management and The Woodbridge Company, the Toronto, Canada-based holding company of the Thomson family – salvages the take-private deal that fell through earlier this month, when General Atlantic withdrew its equity sponsorship.

The Greenwich, Connecticut-based private equity firm said it pulled out of the deal due to an expected shortfall in EGL’s fourth quarter 2006 results. Reported Tuesday, the company’s fourth quarter 2006 net income was $10.9 million, or $0.27 per diluted share, down nearly 43 percent from its fourth quarter 2005 net income of $19.1 million.

The recruitment of Centerbridge and Woodbridge has effectively replicated terms of the original buyout announced January 2 by Crane, EGL’s founder, chairman and chief executive, who owns 18 percent of the firm’s outstanding common stock.

Under terms of the deal, EGL’s outstanding shares will be purchased for $36 per share, a 7.5 percent premium over Tuesday’s closing share price of $33.47, and 21 percent premium over its December 29 closing price of $29.78. Merrill Lynch, Pierce, Fenner & Smith and Woodbridge will provide approximately $1.2 billion in debt to finance the transaction.

Crane will continue as chairman and CEO of EGL, which operates as Eagle Global Logistics. The transportation and logistics company has more than 10,000 employees at more than 400 offices worldwide.