April 07--Tropical Shipping, headquartered at the Port of Palm Beach in Riviera Beach, is being sold for about $220 million to a subsidiary of Saltchuk Resources Inc. of Seattle.
It is owned by Atlanta-based AGL Resources Inc. (NYSE: GAS), which Monday announced it has signed a definitive agreement to sell Tropical to Saltchuk.
If the transaction closes as expected in 90 days, Tropical will go from being part of a publicly traded company to being owned by a family business. Founded in 1982, Saltchuk is owned by sisters Nicole Engle, Michele Seaver and Denise Tabbutt, whose father Mike Garvey co-founded the company.
In October, AGL said it had begun an investigation into payments made to "local officials and other persons" at one of the foreign ports serviced by Tropical, according to its annual report filed with the Securities and Exchange Commission. The payments were made over a series of years and were less than $200,000, AGL said.
"In October 2013, we voluntarily disclosed these matters to the U.S. Department of Justice and the SEC. We will cooperate with any investigation by the DOJ or the SEC. We presently are unable to predict the duration, scope or result of this investigation or of any governmental investigation," AGL said in the report.
Tropical officials referred calls for comment to AGL. AGL spokeswoman Annette Martinez did not respond to a request for an update on the investigation's status before deadline.
Tropical, founded in 1963, with one boat, now has more than 1,000 employees spread around its territory and owns 11 ships and leases three others. Its 2013 operating revenues were $365 million, up from $342 million in 2012.
"We are very pleased to have identified Saltchuk as a well-qualified strategic owner of Tropical Shipping. We are confident that becoming a member of the Saltchuk family, with their deep roots in the transportation, logistics and maritime industries, will guarantee a continued bright future for Tropical Shipping and its employees and valued customers," said Andrew W. Evans, executive vice president and chief financial officer for AGL Resources.
Saltchuk spokeswoman Emily Reiter said the company has no plans to change Tropical's business.
"It's a great fit for both Tropical and Saltchuk," Reiter said. "Transportation is our core business."
With the addition of Tropical, Saltchuk will employ 7,500 people nationwide. Tropical will be Saltchuk's fifth transportation business unit, joining its domestic shipping, tug and barge, air cargo and trucking businesses.
In contrast, AGL's core business is distributing natural gas through its utilities serving 4.5 million customers in seven states, including Florida.
Completion of the transaction depends upon, among other things, the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and approval by the Florida Office of Insurance Regulation. Tropical subsidiary Seven Seas, a cargo insurer, is part of the sale.
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