One of America’s wealthiest clans, the Pritzker family, is continuing to shed assets with the expected sale of Triton Container International Ltd. to private equity firms Warburg Pincus and Vestar Capital, people familiar with the matter said.
The buyout shops are close to a deal to acquire the shipping-container leasing company owned by Chicago’s Pritzker family for about $1 billion, these people said.
The Pritzkers, which took the Hyatt Hotels Corp. hotel chain public in 2009, are among the wealthiest U.S. families, controlling a business empire founded by Nicholas J. Pritzker more than a century ago.
Various members of the family have squabbled in the past decade, which has led the family to divest its assets and break up the fortune among 11 family members.
Last year, the family sold a 51% stake in TransUnion LLC to private-equity firm Madison Dearborn Partners LLC. In March 2008, the Pritzkers sold a majority stake in Marmon Holdings Inc. to Berkshire Hathaway Inc. for $4.5 billion.
Warburg and Vestar are paying “book value,” or the value of Triton’s assets as listed on its balance sheet, people familiar with the matter said. Including Triton’s portfolio of asset-backed securities, the deal’s value is around $3 billion, they said. A deal could be announced in the next two weeks, although negotiations are ongoing and could fall apart, they cautioned.
The Pritzker family had put Triton up for sale in 2006 and the company was expected to fetch $2.5 billion, which included Triton’s debt, at that time, the people familiar with the matter said. The shipping-container industry is cyclical, meaning that periodically there is overcapacity that will drive shipping rates down. Shipping rates did plummet in recent years, but they are poised to recover this year. Container-leasing companies have also been hurt by competition from low-cost Chinese providers.
Triton, which is being advised by Bank of America Corp.’s Bank of America Merrill Lynch, operates and leases cargo containers for ocean carriers.
Founded in 1980, the Hamilton, Bermuda-based company operates a global fleet of containers that it says is one of the youngest fleets in the industry.
The company’s engineers design and supervise the construction of its containers, which are made of steel or aluminum and can be leased for one-way trips or on a longer-term basis.
Triton also provides lease purchase and sale leaseback financing to its customers. Companies that lease fleets–whether cars or containers–typically fund purchases by selling asset-backed securities, a type of financial instrument whose value is derived from the underlying assets. A Triton representative could not be reached for comment.