The purchase price includes $US 30m for capital expenditures on wagon lining operations and other facility improvements at ARI and $US 50m in convertible notes issued by Greenbrier to ARI, with the balance in cash consideration. ARI was acquired by ITE in December 2018.
Greenbrier says the acquisition will diversify its American manufacturing presence and broaden its product offerings with the addition of complementary designs.
Greenbrier will acquire two wagon manufacturing facilities in Arkansas and five other operations that provide a range of vehicle components and parts including hopper wagon outlets, tank wagon valves, axles, castings and running boards, among other ancillary products.
Significant manufacturing efficiencies and cost savings are expected from the acquisition, along with a skilled workforce and geographic advantages throughout North America.
Greenbrier says the acquisition will increase vehicle offerings by enabling access to vertically integrated parts and components, and broaden its customer base by capitalising on non-overlapping relationships with strategic operating lessors, class 1 and short line railways and shippers.
“We expect the acquisition to be meaningfully accretive and position Greenbrier for growth in our core manufacturing and engineering business in North America,” says Greenbrier chairman and CEO, Mr William A Furman.
The transaction is subject to customary regulatory reviews and approvals, and Greenbrier expects the deal to close by the end of the year if approved.
BofA Merrill Lynch and Goldman Sachs & Co are serving as financial advisors to Greenbrier.