Matson To Acquire Horizon Lines

(RTTNews) - Matson, Inc. (MATX) and Horizon Lines, Inc. (HRZL) said Tuesday that they have entered into a definitive merger agreement pursuant to which Matson will acquire the stock of Horizon, which will include its Alaska operations and the assumption of all non-Hawaii business liabilities.

Separately, Horizon also announced that it has agreed to sell its Hawaii operations to The Pasha Group for $141.5 million and plans to shut down its Puerto Rico liner operations by the end of 2014.

Under the deal, Matson will acquire Horizon for $0.72 per share, or $69.2 million, plus the repayment of debt outstanding at closing. The total value for the deal is $456.1 million, based on Horizon's net debt outstanding as of September 21, less the anticipated proceeds from the Hawaii business sale.

The Boards of Directors of both companies have unanimously approved the deal, and Horizon shareholders representing 55% of the fully diluted equity, which also represents 41% of the outstanding voting common stock on November 11, have agreed to vote their shares in support of the deal.

The deal is expected to close in 2015 after the completion of Horizon's sale of its Hawaii business, Horizon's shareholder approval, and other customary closing conditions.

Excluding one-time items, Matson expects the deal to be immediately accretive to earnings per share, providing low to mid-teens percent annual EPS accretion in years one and two post-closing, and about $0.35 to $0.45 annual EPS accretion thereafter.

Matson expects one-time pre-tax deal closing costs to be about $25 million and one-time pre-tax restructuring and integration costs of about $20 million to $25 million.

Matson shares closed Tuesday's regular trading session unchanged at $29.23, but gained $2.28 or 7.80% in after hours trading.