The Montreal maritime and environmental services company Logistec rejected a Quebec solution involving the Caisse de dépôt before accepting the purchase offer from an American group.

Examining its strategic options since the spring, Logistec announced Monday that it had accepted a purchase offer presented by two private investment firms in New York.

The proposal from Blue Wolf Capital Partners, in partnership with the firm Stonepeak, amounts to $67 per share, giving Logistec an enterprise value of $1.2 billion.

This is the equivalent of a 17% premium to the price at market close on Friday, and a 53% premium to the share price before the strategic review process was announced on May 19.

That day, Logistec revealed that its controlling shareholder, the Paquin family, wanted to sell its shares.

Logistec was founded by the late Roger Paquin over 70 years ago. His daughter Madeleine has run the business for 27 years and has been a board member for 36 years. Suzanne Paquin, Madeleine Paquin’s sister, has been a board member for 36 years and runs a shipping company partly owned by Logistec. Their sister Nicole has been an administrator at Logistec for 19 years.

Investissement Québec is in discussions with Blue Wolf for a potential investment in the company. Investissement Québec’s participation would support Blue Wolf’s commitment to maintaining Logistec’s head office and operations in Quebec, and to continuing investments in the province.

Blue Wolf says it intends to make an investment of more than $200 million in capital expenditures and growth initiatives to “contribute significantly to the company as well as to the economy of Quebec and the Canada.”

“Maritime services combined with Logistec’s environmental services, which focus on the rehabilitation of aging water pipes and soil reclamation, represent attractive growth opportunities,” comments Stonepeak Senior Managing Director James Wyper.

The largest institutional shareholder of Logistec with a stake greater than 10%, the Caisse de dépôt did not wish to reveal the content of the offer filed with a Quebec partner as part of the process.

Caisse management intends to read the circular detailing the proposed arrangement “to properly assess the impacts on the company, employees and other stakeholders in Quebec.”

Logistec’s agreed price of $67 per share is lower than the expectations of Gabriel Bouchard-Philipps, portfolio manager at Van Berkom. Instead, he expected $80 or more per share.

He concedes, however, that the economic context has become more uncertain in recent months and that Logistec handles goods. “The dynamics are changing and interest rates have gone up,” he says.

“It’s still a good price,” he adds compared to the stock price where the stock was previously trading. He finds it difficult to see how the transaction can be blocked since the Paquin family controls 77% of the shares.

Gabriel Bouchard-Philipps believes he knows what the future holds for Logistec. “The company will be sold in pieces within three years. Activities in the maritime sector are a jewel and there are no synergies with environmental activities. These are two separate businesses which interest different shareholders. »

Portfolio manager Stephen Takacsy, of the firm Gestion Lester, also believed that Logistec is worth more.

“At $67 per share, it’s a bargain for Blue Wolf and Stonepeak who will realize the upside of maximizing the value of each division,” he says.

“We and other managers believe Logistec is worth at least 20% to 30% more in its current form, and even more if the two divisions are sold separately to strategic buyers. We therefore expect the possibility of a higher offer, which is permitted at this stage. »

Gabriel Bouchard-Philipps is not surprised to see local companies being bought by American interests. “For 10 or 15 years, when the Canadian dollar has been under pressure, Americans have taken advantage of it to buy Canadian companies. »

OpSens and H2O Innovation are two other Quebec companies having accepted purchase offers from the United States this month.

Madeleine Paquin was not available Monday for an interview.

Logistec posted a net profit up 18%, to 54 million, in 2022, on a turnover up 21% which came close to 900 million.

The maritime services sector handled historic cargo volumes last year due to supply chain disruptions.

Businesses in the environmental sector were built from almost scratch and today generate a turnover in excess of 330 million.

Through its stake in Termont, Logistec is the largest container terminal operator at the Port of Montreal.