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Greenbrier to acquire American Railcar Industries in $400m deal

18 Apr 2019

USA: The Greenbrier Companies Inc has agreed to acquire the manufacturing business of American Railcar Industries from ITE Management in a deal worth $400m.

The transaction announced on April 18 is expected to close this year, subject to customary regulatory approvals. The gross purchase price is $430m, including $30m for capital expenditures on facility improvements at ARI and convertible notes issued by Greenbrier to ARI in the principal amount of $50m.  Bank of America Merrill Lynch and Goldman Sachs & Co are serving as financial advisors to Greenbrier. 

Greenbrier said the acquisition would diversify its manufacturing presence and broaden its product range, as well as providing a ‘skilled workforce and geographic advantages’.  The deal includes wagon manufacturing facilities at Paragould and Marmaduke in Arkansas, and five other operations supplying components including hopper outlets, valves, axles, castings and running boards.

‘We expect the acquisition to be meaningfully accretive and position Greenbrier for growth in our core manufacturing and engineering business in North America’, said Greenbrier Chairman & CEO William A Furman.  ‘With a broader product portfolio and efficiencies extending from a larger operations base in America, we see this acquisition as a unique opportunity for Greenbrier to extend its position as a global leader in railcar manufacturing, with an increase in our total US-based production and an expansion of our American-based workforce.’