About five months ago, an investment banker approached Algoma Central Corp. with an offer that didn’t come as a complete surprise to president and CEO Greg Wight.
With owner Jack Leitch in his 90s, privately held Upper Lakes Group wanted to sell its vessels and related marine assets. As a longtime partner in Great Lakes shipping, Algoma had the right of first refusal.
What followed was the expected due diligence determining the value of ULG’s assets, but even it was unusual, Wight recalls.
“We were buying the other half of a business we knew intimately. We knew the acquisition would be complicated but we also knew what we were getting into.”
On April 15, Algoma announced the transaction had gained the approval of the federal Competition Bureau and was completed. But he said lots of work remains to integrate the two businesses.
Seaway Martine Transport, which operated the Algoma-ULG vessel pool, is being folded into Algoma including the painful process of letting some staff go, Wight said. He wouldn’t go into the numbers involved. The crews from the Upper Lakes ships have been offered their jobs.
The company will receive its first new freighter this summer – originally ordered by Upper Lakes. The Algoma Mariner will become the centrepiece of an effort by the company to promote its expanded operation and the value of marine transport as an alternative to the congested highways and rail lines in the Great Lakes region.
With the addition of the ULS ships, Algoma’s fleet consists of 21 self-unloading dry-bulk carriers, 12 gearless dry-bulk carriers and seven product tankers.
In addition, seven of the Equinox Class vessels designed specially for domestic dry-bulk service, will arrive in Canada during the next few years bringing in a sweeping change to the face of Great Lakes shipping. Algoma will decide then which of the older ships it will keep to handle any surge in business.
Algoma also has interests in ocean dry-bulk and product tankers operating in international markets and it owns diversified ship repair and a steel-fabricating facility active in the Great Lakes and St. Lawrence regions of Canada. It has taken over four ocean-going vessels that it jointly owned with ULG.