Fortress Looks to Sell TRAC Intermodal

Private equity firm Fortress Investment Group LLC is exploring a sale of TRAC Intermodal LLC, a logistics equipment leasing company that could be valued at more than $1.7 billion, including debt, according to people familiar with the matter.

Fortress has hired investment bank Morgan Stanley to run an auction for TRAC, and expects first-round bids for the Princeton, New Jersey-based company next month, the people said on Thursday.

TRAC has annual earnings before interest, tax, depreciation and amortization of around $190 million, the people added.

The sources asked not to be identified because the sale process is confidential. Fortress, TRAC and Morgan Stanley representatives did not respond to requests for comment.

Founded in 1968, TRAC Intermodal is the largest provider of marine and ground transport chassis in North America. It has a fleet of close to 276,000 chassis. The net book value of its equipment was about $1.45 billion as of the end of September.

Fortress took the company private in 2007 for $2.4 billion, including the assumption of debt. TRAC was called Interpool Inc at the time, and Fortress used a holding company called Seacastle Inc for the purchase. Seacastle later registered for an initial public offering, but withdrew its IPO registration in 2009 following the financial crisis.

Seacastle did manage to take SeaCube Container Leasing Ltd, a container leasing subsidiary, public in 2010. Ontario Teachers' Pension Plan acquired SeaCube for $1.8 billion, including the assumption of debt, in 2013.

TRAC's two main competitors are Kenilworth, New Jersey-based Flexi-Van Leasing Inc, controlled by Dole Food Company Inc owner David Murdock, and Charlotte, North Carolina-based Direct ChassisLink Inc, which is owned by private equity firm Littlejohn & Co LLC.