Matson Completes Alaska Acquisition For $469 Million

• Becomes a Leading Container Carrier to Alaska
  
• Acquisition Accretive to Matson's Annual EPS and Cash Flow per Share (before one-time items)

News Release from Matson, May 29, 2015

Matson, Inc. (NYSE: MATX) today announced that it has completed its previously announced acquisition of Horizon Lines, Inc. (OTCQB: HRZL) which includes Horizon's Alaska operations and the assumption of all non-Hawaii business liabilities (the "Transaction").  Separately and immediately preceding the completion of the Transaction, Horizon completed the sale of its Hawaii trade lane assets and liabilities to The Pasha Group for $141.5 million.

Matson acquired the stock of Horizon for $0.72 per fully diluted common share, or $69 million, and repaid Horizon's outstanding debt, for a total transaction value of $469 million (before transaction costs).  Matson financed the Transaction with cash on hand and available borrowings under its revolving credit facility.

Matson will continue Horizon's long operating history in Alaska with a three vessel deployment of diesel powered Jones Act qualified containerships that provide two weekly sailings from Tacoma to Anchorage and Kodiak, and a weekly sailing to Dutch Harbor.  In addition, Matson will be operating port terminals in Anchorage, Kodiak and Dutch Harbor and acquiring several reserve steam powered Jones Act containerships that may be used for dry-dock relief.

"We are pleased to have completed this strategic acquisition that substantially grows our ocean transportation business into the attractive Alaska market," said Matt Cox, President and Chief Executive Officer of Matson. "The Alaska market is a natural geographic extension of our platform as a leader serving our customers in the Pacific. We are excited by the long-term prospects of the Alaska trade lane and expect this transaction to deliver shareholder value through earnings and cash flow accretion."

Excluding the one-time transaction costs and other restructuring and integration costs, Matson expects the Transaction to be accretive to annual earnings per share ("EPS"), providing low to mid-teens percent annual EPS accretion in years one and two post-closing, and approximately $0.35 to $0.45 of annual EPS accretion thereafter.  Within two years post-closing, Matson expects the Transaction to contribute approximately $70 million to consolidated annual EBITDA and to be approximately $1.00 accretive to annual cash flow per share.

Matson expects one-time pre-tax transaction costs and other restructuring and integration costs of approximately $45 to $50 million of which approximately 65 percent, 30 percent and 5 percent are expected to be incurred in the second quarter 2015, the second half of 2015 and 2016, respectively.  Matson intends to update its 2015 outlook for the effects of the Transaction during its second quarter 2015 earnings conference call, currently scheduled for early August 2015.

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From Pasha Group

Welcome, Horizon customers:     May 29, 2015

The Pasha Group’s acquisition of the Hawaii trade-lane business of Horizon Lines was completed today. In concert with this important milestone, I have the pleasure of officially welcoming you and your organization to our Pasha family of customers. As President and CEO of this third-generation company, I know I speak for all of us at The Pasha Group and Pasha Hawaii in affirming our commitment to providing you and your organization with the finest shipping and logistics services available in the Hawaii trade lane.

We are also honored to welcome the former Horizon Hawaii trade-lane team, who are now working alongside their Pasha Hawaii counterparts to bring you an even wider offering of high-quality, shipping and logistics services for dry and refrigerated containers and a variety of roll-on/roll-off cargoes. Every member of the team is focused on providing for a seamless transition, delivering the service excellence you have come to expect for your Hawaii business.

As we integrate our operations, Horizon’s former Hawaii vessels — the Enterprise, the Reliance, the Spirit and the Pacific – will join Pasha’s two Jones Act-qualified vessels, the M/V Jean Anne and the new 692-foot M/V Marjorie C. Our diverse offerings operating on three vessel strings will serve Honolulu, Los Angeles, Oakland, and San Diego with connecting service to the Pacific Northwest via intermodal services. Pasha Hawaii’s technical services team will oversee operations for its entire fleet, with Jacksonville, Florida-based Crowley Maritime Corporation providing ship management of the new Horizon vessels and crew through Crowley subsidiary Marine Transport Management, Inc.

Our acquisition of Horizon Lines’ Hawaii business also includes Horizon subsidiaries Hawaii Stevedores, Inc. and the California-based operations of Sea-Logix, LLC. Pasha has engaged Norton Lilly to provide certain liner agency services, both in Hawaii and the Mainland. We will continue our long-time partnership with Young Brothers to maintain connecting-carrier service to the Neighbor Islands.

At pashahawaii.com, you will find the new Pasha Hawaii Service Routing Guide and current Sailing Schedule. As we work toward full integration of our operations, there may be some additional schedule changes. With the acquired assets and the addition of the Marjorie C, we will have one ship remain in reserve to allow for maintenance and repair of our deployed fleet, and provide for the continuity of service. Your Pasha Hawaii account manager will be reaching out to you directly with additional details.

I want to thank you for your business, your support, and your feedback as we enter a new era of transportation for the vital and growing Hawaii-Mainland trade-lane business.

My Pasha Group colleagues and I look forward to meeting you, and to extending an in-person welcome.

Best regards,

George Pasha IV

President and CEO