THE Andersons has sold its railcar leasing business to American Industrial Transport (AITX) for approximately $US 550m in cash.
It also intends selling off its remaining railcar repair business including 29 US facilities, as part of a ‘strategic decision’ to dispose of its railcar interests and focus on its agricultural business which includes commodity trading, ethanol and plant nutrient sectors.
The Andersons says its expects to use the sale to initially pay down debt while maintaining a disciplined approach to future growth investments and return cash to shareholders.
AITX is an affiliate of ITE Management and provides railcar leasing, repair and data services to the freight industry. It is an asset manager which targets transport and industrial assets and related industries and services.
“The railcar leasing business has been a successful and consistent cash flow generator for The Andersons,” says president and CEO Mr Pat Bowe. “The strategic decision to sell the leasing business allows us to focus on and invest in our agricultural segments to leverage our core strengths.
“While we intend to divest our rail segment in its entirety, we will continue normal operations of our repair and service business as we conduct a sale process.”
“We expect to hire a majority of The Andersons employees in the railcar leasing business,” says ITE managing partner and AITX board of directors member Mr Jason Koenig, although he didn’t say how many jobs would be retained.