Linc Logistics IPO could raise $126.3 million, plans to use proceeds for dividends and debt

Tuesday, October 5, 2010

Linc Logistics IPO could raise $126.3 million

NEW YORK — Linc Logistics Co., which provides inventory management and transportation services to companies such as Ford and Chrysler, could raise as much as $126.3 million in an initial public offering this week.

Linc, which gets most of its business from the auto industry, said in filings with the Securities and Exchange Commission that it expects the stock to price between $14 and $16 each, and that it will offer 9.2 million shares, plus another 1.4 million to its underwriters to cover excess demand. If the underwriters exercise the full overallotment option, the company could raise $145.6 million, after expenses.

The company, based in Warren, Mich., said it will use $93.1 million of the proceeds to pay dividends. The dividends include $25 million that had been owed to CenTra Inc., its sole shareholder at the end of 2006. The 2006 dividend went unpaid and has been accruing interest. The promissory note is now held by DIBC Investments Inc.

Other uses for the money raised include paying down a line of credit that has a balance of $16.6 million. It said the rest of the money would be used for working capital and general corporate purposes.

Linc has 31 logistics facilities in the United States, Canada and Mexico. The company had 2009 revenue of $178 million, down 28 percent from a year earlier. Net income rose 37 percent to $14.9 million.

Linc said it operates the largest receiving and distribution centers for Ford and Chrysler and that in 2009, nearly 72 percent of its revenue came from those companies and General Motors. In recent years, Linc said it has been targeting areas outside of the auto industry. Some of its other customers include engine makers Cummins Engine and Pratt & Whitney.

The company’s CEO, H.E. Scott Wolfe, 64, was previously manager of inbound transportation at American Motors Corp. and worked in various roles at General Motors for 15 years.

Linc’s shares are expected to trade on the Nasdaq Global Select Market under the symbol “LLGX.”

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