The turnaround specialist of aerospace investment
With Alinda Capital Partners as its new owner, ACL Airshop has got a “bigger gas tank” to fuel the next stage of growth for one of the world’s leading technology-enabled custom ULD solutions provider.
Steve Townes is often referred as the turnaround specialist. He is an entrepreneur, a change agent, a deal maker, a chief executive officer and often a “chief encouragement officer”.
Townes, the CEO and founder of Ranger Aerospace, an aerospace services investor company based in Greenville, South Carolina in the US, is known to make very strategic investments into companies and acquire them to create huge value over a very short period of time and then exit making very good returns.
Townes founded Ranger in 1997 and since then he has been investing in both leveraged buyout (LBO) and growth equity transactions. Ranger Aerospace has been the management stewardship team for over $650 million in various buying, selling, and investing transactions over the past two decades. Townes typically looks for niche consolidations as part of the build-out strategy with a platform company. The common theme, for Ranger and for Townes, has always been, buy a good company, aggressively build it up, and eventually finding a new home with a giant strategic owner.
“Investment returns in each of Ranger's successful large-scale divestitures have been superior for the sector, with IRR (internal rate of return) on its strongest exit slightly over 60 percent, plus commensurate cash-on-cash multiples,” wrote Townes in a message published on the website of Ranger Aerospace.
When Townes closed the deal to buy ACL Airshop, one of the world’s leading technology-enabled custom ULD solutions provider, in February 2016, it was the culmination of a 16-year investment persuasion. Ranger had spotted Airline Container Leasing, started in New York in 1983 to ship horses by air, in 2000 and Townes got acquainted with the company and its owner. But Airline Container Leasing was not up for sale then. But regular and uninterrupted calls, mails and follow-ups led to the deal that was closed in April this year. Meanwhile Airline Container Leasing grew its services to cover all ULD needs for numerous airlines and merged with AirShop Holdings of Amsterdam in 2007 to form what is called ACL Asirshop today.
However, for Townes, a West Point graduate and a “turnaround specialist”, it took just five years to take ACL Airshop on to the “global stage” and find a new buyer in Alinda Capital Partners, an infrastructure fund manager. The transaction successfully concluded in April 2021.
“It was absolutely a rocket ride,” said Townes about the growth of ACL Airshop since its acquisition by Ranger in 2016 and its sale to Alinda now. Townes is also the president and chief executive officer of ACL Airshop and he will continue to be the CEO under the new ownership.
Companies that are growing like ours need to put a steady amount of capital to work to keep up the momentum. Alinda shares our vision for fuelling the next stage of growth for ACL Airshop Steve Townes, Ranger Aerospace & ACL Airshop
Talking about the reasons for the sale Townes said, “We have followed a tried-and-true pattern for transformational leadership and dynamic growth. We have been growing steadily, building the global network, increasing the size of our ULD fleet, adding innovative new logistics technologies for customers’ better efficiencies, and taking very good care of our people all along the way. But as I said with our Board, “we need a bigger gas tank.” Companies that are growing like ours need to put a steady amount of capital to work to keep up the momentum. Alinda shares our vision for fuelling the next stage of growth for ACL Airshop.”
Today ACL Airshop, a global leader in air cargo unit load device (ULD) logistics solutions, maintains and leases more than 50,000 ULDs, including air freight pallets and containers, issued from 55 airport hub locations across North America, Europe, Asia Pacific, the Middle East and Latin America. ACL Airshop’s strong growth in recent years builds on the company’s 38-year heritage as an air cargo equipment and logistics specialist. Its worldwide services network has expanded from 23 airport hub locations in 2016 to 55 at latest count.
ACL Airshop is a portfolio company of Argosy Private Equity (Argosy), Balance Point Capital (Balance Point), ORIX Private Equity Solutions, Azalea Capital (Azalea) and Ranger Aerospace (Ranger). With the Alinda acquisition all four institutional investors fully exited the investment platform “after,” what Townes described as, “enjoying very good returns”. “Alinda is now the vast majority owner, but the management team also co-invested in ACL Airshop, as did Ranger Aerospace LLC. All of us believe in the growth trajectory we have created as a team. This will be an exciting new chapter,” he added.
ACL Airshop's new manufacturing facility in Greenville, South Carolina, inaugurated in May 2019
ACL Airshop’s current management and operations team will continue to lead the organization under its new ownership. “I will remain CEO and a shareholder in the ACL Airshop enterprise. I love the company; it is a vibrant, exciting, high-performance culture. It has been an honor and a privilege to be part of this outstanding organisation,” said Townes.
Townes added that the acquisition will benefit ACL Airshop’s employees, suppliers, partners, and customers through access to Alinda’s resources and their proven strategies of helping essential infrastructure businesses grow profitably in their market.
According to Townes, the capital structure that got ACL Airshop to the current level was ready for a liquidity event, and that made the decision to go for an investor. “That is the classic cycle of private equity,” he said. “Yet the company still has many opportunities and pathways for strategic scalability. Hence, with an infrastructure partner we are able to grow with a longer timeline and broader horizon. We began the very low-key effort in late spring of 2020, ramped it up in the fall-winter months, and closed the new arrangements in April,” Townes detailed the timeline of the acquisition.
Because ACL Airshop and Alinda are both privately held, details about the transaction are not revealed. “Suffice to say that the entrepreneurial teams of experts in ACL Airshop worked very hard, grew the business aggressively, and created a lot of value. We followed a disciplined business plan and a laser-focused strategy. It worked well, even despite the pandemic. We have been most fortunate,” said Townes.
Yet the company still has many opportunities and pathways for strategic scalability. Hence, with an infrastructure partner we are able to grow with a longer timeline and broader horizon Steve Townes, Ranger Aerospace & ACL Airshop
Harris Williams, an investment bank specializing in M&A advisory services, advised ACL Airshop on its acquisition by Alinda Capital Partners. "We are excited to watch ACL Airshop continue to grow in partnership with Alinda,” said Chris Smith, a director at Harris Williams.
Alinda is among the world’s most successful investors in infrastructure, including transportation and logistics. Its focus is on mid-market infrastructure assets that provide essential services. Alinda has holdings in infrastructure businesses in all 50 US states. It also has investments in Canada, the United Kingdom and Europe. Alinda-owned businesses serve over 100 million customers annually.
“Alinda has experience with airport operations, equipment leasing and logistics & transportation companies. It also has a successful track record of investment in pooled and leased equipment, and is experienced in backing growth-oriented companies,” said Townes. “As a result,” he said, “it wasn’t just good fit for capital reasons but it was a good fit for strategic experience reasons. We are lucky to be partnered with such a global infrastructure investor.”
Founded in 2005, Alinda’s current investments in the transportation & logistics infrastructure segment include Heathrow Airport Holdings Limited; Heathrow Express, the rail service between Heathrow Airport and Paddington Station, London; Virginia International Gateway that owns the container terminal; BCTN, an inland terminal owner and operator with a network of eight container terminals on the Albert Canal in Belgium and on the Rhine and Maas Rivers and canals in the Netherlands; CVO or Connected Vehicle Optimization that provides contractual services to the PrePass Safety Alliance; and PECO Pallet that owns a pool of approximately 20 million wood block pallets that primarily serve food and beverage manufacturers in shipping their goods.
Alinda chairman Chris Beale described ACL Airshop as a uniquely positioned business and he is impressed by the exceptional ACL Airshop management team. “We look forward to supporting their growth strategies,” said Beale.