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Jax Daily Record Thursday, Jul. 8, 202105:10 AM EST

CSX completes Quality Carriers acquisition; Foley, Martire find acquisition target

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The Jacksonville-based railroad company faces additional regulatory scrutiny in its deal for Pan Am Railways.
by: Mark Basch Contributing Writer

CSX Corp. closed one acquisition and took steps toward regulatory approval for another last week.

The Jacksonville-based railroad company completed its acquisition of Tampa-based trucking company Quality Carriers Inc., which was announced in May.

CSX also filed an updated application with the U.S. Surface Transportation Board for its proposed acquisition of Pan Am Railways Inc., which would expand its rail network in New England.

CSX announced the Pan Am deal in November 2020 and hoped for quick approval, but the STB in March classified the deal as “significant” and said it would need a longer review.

The regulatory agency told CSX in May, without commenting on the merits of the deal, that the company needed to revise its application with additional information.

CSX said in a July 2 news release it submitted an amended application that provides “all of the additional details” requested by the agency.

“The proposed transaction is an ‘end-to-end’ acquisition that will integrate the New England rail network owned by Pan Am into CSX’s national rail network, creating seamless single-line service,” CSX Chief Executive James Foote said in the release.

“This will provide substantial benefits to shippers with low-cost, environmentally-friendly rail service with truck-like reliability,” he said.

Massachusetts-based Pan Am has an 1,800-mile rail network that would expand CSX’s operations in Connecticut, New York and Massachusetts and add Vermont, New Hampshire and Maine to its 23-state network.

CSX said the deal would create efficiencies for freight customers and it promised to invest an unspecified amount in infrastructure to upgrade the rail network.

CSX’s acquisition of Quality Carriers expands its multimodal capabilities for shipping bulk liquid chemicals.

Quality Carriers has a network of more than 100 terminals in North America providing service to chemical producers and processors.

CSX has not disclosed terms for either the Pan Am or Quality Carriers deal.

Foley, Martire find acquisition target

A special purpose acquisition company (SPAC) formed last year by Bill Foley and Frank Martire found its target.

Trebia Acquisition Corp. announced an agreement last week to merge with System1, which it described as an “omnichannel customer acquisition platform.”

System1 operates more than 40 digital properties, including websites MapQuest and HowStuffWorks.

Foley is chairman of Jacksonville-based Fidelity National Financial Inc. and Martire is the former CEO of Fidelity National Information Services Inc., which was spun off from Fidelity National Financial.

Foley has formed a number of SPACs in the past couple of years. He teamed with Martire to launch an initial public offering for Trebia a year ago and they had been looking for an acquisition target.

Martire said in a conference call that they found System1 in the fourth quarter of 2020 and have been working with its management to complete a deal.

“System1 is a leading technology and data driven customer acquisition business with a robust operating model that consistently generates strong organic growth, attractive margins, and profitability, all of which are all driven by a highly differentiated technology platform,” he said, according to a transcript posted by the company.

System1 had $580 million in revenue last year and projects that to grow to $763 million this year.

Under the agreement, the merger will make System1 a public company called System1 Group Inc. 

It is expected to trade on the New York Stock Exchange under the ticker “SST.”

System1 co-founder Michael Blend will remain CEO. Foley and Martire will serve on the board of directors.

SPAC with ties to Jacksonville files for an IPO

Another SPAC with ties to Jacksonville is planning an IPO.

Riverview Acquisition Corp. filed an updated registration statement with the Securities and Exchange Commission last week to raise $250 million and seek an acquisition target.

Riverview is headquartered in Memphis, Tennessee, but two of its top officers are executives of a holding company that controls Jacksonville-based Stillwater Insurance Co.

Charles Slatery is chairman and CEO of privately owned WT Holdings Inc., owner of Stillwater, and also is president and chief investment officer of Riverview.

Riverview Chief Financial Officer William Thompson is executive vice president of WT Holdings.

Stillwater, ironically, was formed as a property and casualty insurance subsidiary of Fidelity National Financial in 2000.

But title insurance company Fidelity, which has a history of buying and selling companies under Foley, sold the business to private investors in 2012.

The Riverview IPO filling’s only references to Stillwater are its officers’ connections.

However, it does mention insurance companies as a possible target.

“While our management has unique operating and investment experience in a wide variety of industries, we intend to focus on consumer-focused enterprises, including e-commerce, on the energy services and renewables sector and on the insurance and financial services sector,” the filing said.

Riverview is offering 25 million units at $10 each, consisting of one share of common stock and one half of a warrant to buy additional shares.

Advantus sells snack business

Office Snax LLC said last week it acquired the snack and candy business of Jacksonville-based Advantus Corp.

Terms of the deal were not disclosed.

Advantus is a privately held manufacturer of consumer, commercial and durable goods.

Oak Brook, Illinois-based Office Snax supplies snack, candy and beverage items to the office products industry.

Shoreline forms pavement company

Ponte Vedra Beach-based Shoreline Equity Partners LLC said last week it formed a company called Pavement Partners Holding to acquire pavement repair and maintenance providers.

The private equity firm said it is partnering with Finley Asphalt & Concrete LLC., an asphalt and concrete company based in Manassas, Virginia.

Shoreline said it is seeking to expand the business nationally through acquisitions and organic growth.

 

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