Madison Dearborn exits dredging company

The US private equity firm will relinquish its remaining 24 percent stake, currently valued at roughly $103 million, in NASDAQ-listed Great Lakes Dredge & Dock. The Illinois-based dredging company was acquired by Madison Dearborn for $340m in 1998.

Chicago-based private equity firm Madison Dearborn Partners will sell its roughly $103 million (€70 million) stake in Great Lakes Dredge & Dock (GLDD) as part of the NASDAQ-listed dredging company’s shelf offering. 

GLDD has filed for the secondary public offering of more than 18 million shares of its common stock, of which Madison Dearborn owns 14 million shares. GLDD will not receive any proceeds from the sale, which could total up to $138 million at the proposed maximum offer price of $7.36 per share.

Madison Dearborn’s 24 percent equity stake in GLDD totals roughly $103 million, calculated according to the company’s trading price of $7.25 at time of press.

Illinois-based GLDD contracts its fleet of 180 specialised marine vessels for a variety dredging projects, including the deepening of shipping canals and the renourishing storm-damaged coastline.

Although the 118-year old company’s primary revenue stream stems from its North American operations, 

GLDD dredge

GLDD maintains a strong presence in the Middle East. In addition to its core marine dredging business, the firm also offers commercial and industrial demolition services, and owns a 50 percent interest in a New Jersey sand mining operation that supplies sand for road and building construction. 

Madison Dearborn agreed to purchase GLDD for $340 million in cash in 2003 from now defunct Citigroup Venture Capital, which had owned the company since 1998. Three years later, Madison Dearborn took GLDD public through a reverse merger with blank cheque company Aldabra Acquisition, which valued GLDD at roughly $410 million.

For the first six months of 2008. GLDD reported $281 million in revenues, up 16 percent from the same period last year. The company’s gross profit margin however decreased from 13.2 percent to 11.9 percent over the same timespan.