TAL Tal Education Group

   By Josh Beckerman 
 

TAL International Group Inc. (TAL), which leases intermodal freight containers, has agreed to merge with privately owned Triton Container International Ltd. in a stock swap.

TAL, which trades on the New York Stock Exchange, will combine with Triton under a newly formed holding company that is expected to be listed on the NYSE.

Triton shareholders will own 55% of the combined company's equity, with TAL stockholders owning 45%. Triton's owners include private-equity firms Warburg Pincus and Vestar Capital Partners.

The deal is projected to add about 30% to earnings per share for TAL's existing shareholders when cost savings are fully realized.

TAL Chief Executive Brian Sondey said in a statement that "the new company's enhanced capabilities, larger scale and improved cost competitiveness will better position it in the current soft operating environment and provide valuable operating leverage when the market recovers."

On Oct. 28, TAL said its third-quarter profit fell 31%, while leasing revenue rose 2.6% to $154.4 million. The company said its utilization rate was strong, but pricing was pressured by factors including lower steel prices.

For the 12 months ended Sept. 30, TAL's leasing revenue was $608 million, while Triton's was $716 million.

In after-hours trading, TAL shares were down 1.8% to $17.03.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

November 09, 2015 19:02 ET (00:02 GMT)

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