First the funding. Then the turnaround. Now the exit.
Santa Ana-based logistics company GeoLogistics Corp. filed plans to go public on Tuesday, looking to raise $175 million.
The move comes four years after turnaround investor Questor Management Co. of Detroit bought a $67.5 million stake in GeoLogistics and set off on a course to right the struggling transportation services company.
GeoLogistics handles freight-forwarding, customs brokerage, warehousing, supply-chain management and other shipping services for retailers and manufacturers.
When Questor invested in GeoLogistics, the company was in the process of paying down debt, improving operations and expanding its business.
Questor helped GeoLogistics rework a credit line with its prior investors, Oaktree Capital Management LLC of Los Angeles and William E. Simon & Sons of Morristown, N.J.,
The two early investors had put nearly $90 million into GeoLogistics since 1996, when they bought into the company as a way to acquire and consolidate logistics businesses.
With the arrival of Questor, GeoLogistics started on a “100-day” plan to reverse operational losses at the company, which was suffering along with some of its retail and technology customers.
The plan entailed streaming operations and monitoring the company’s performance on a monthly basis.
GeoLogistics’ woes stemmed from its strategy of acquisitions. In 1996, it bought Bekins, the moving company, for $50 million. It was the first of many buys that proved hard to integrate.
Instead of gaining efficiency through size, GeoLogistics’ costs soared.
In 1999, GeoLogistics sold Caribbean Air Services for $115 million, after buying the company a year earlier for $30 million. The proceeds went to pay down debt.
The move helped but didn’t get GeoLogistics out of the woods. The company came close to bankruptcy in 1999. Oaktree and Simon set up an out-of-court restructuring that swapped $110 million in company junk bonds for preferred and common stock.
The two investment firms put in another $24 million into the company, according to a report in financial publication The Daily Deal.
A year after Questor came aboard, GeoLogistics tapped transportation industry veteran William J. Flynn as its chief executive.
Before joining GeoLogistics, Flynn worked for CSX Transportation Inc., which along with Buena Park-based Con-Way Transportation, is part of Florida’s CSX Corp.
GeoLogistics counts yearly revenue of about $1.3 billion and is the seventh largest privately held company here, according to the Business Journal’s list of private companies.
Customers include General Electric Co., Wal-Mart Stores Inc. and IBM Corp.
Last year, GeoLogistics was tapped as the global logistics service provider for Mexico’s Cemex SA de CV, the third-largest cement company which has mounted a big U.S. push.
At $175 million, GeoLogistics could be one of the larger public offerings for Orange County. Last year, San Clemente-based Sunstone Hotel Investors LLC in San Clemente raised $413 million in the largest stock debut of 2004.
At least one other company, Newport Beach-based Jazz Semiconductor Inc., has filed plans to go public. Jazz, which makes chips under contract from other companies, was expected to debut in 2004. Its plans likely were scuttled by woes at its biggest customers.
Investment bankers and others still are watching Jazz, which could raise as much as $150 million.
