INTERNATIONAL: Genesee & Wyoming Inc announced on March 25 that it had completed the acquisition of 94% of Freightliner Group Ltd for £492m, plus the assumption of £19m of net debt and capitalised leases. Freightliner’s management team has retained a 6% interest which G&W expects to acquire by mid-2020.
In connection with the acquisition, G&W has also entered into a new five-year senior secured credit facility, comprising a US$2·175bn term loan and a US$625m revolving credit facility. G&W expects to have approximately $475m of revolver capacity after the Freightliner closing.
The acquisition and related financing will result in one-time expenses in the first quarter of 2015 totalling approximately US$29m. This comprises US$14m of advisory and legal fees and taxes, plus $15m of foreign exchange loss resulting from the difference between the US$748m actual US dollar cost of the pound sterling acquisition, which included forward purchases of sterling at a weighted average exchange rate of 1·52 US$/£, and the US dollar acquisition price of $733m;
- In an update on its activities in the first quarter of 2015, G&W’s said traffic had been weaker than expected owning to severe winter weather in North America, as well as weakness in commodity groups including steam coal and metals. G&W expects total revenues in the first quarter to be $375m, or $25m below guidance provided on February 10, and costs to be $5m higher as a result of the winter conditions. As a result of these factors, G&W expects net income in the first quarter of 2015 to be approximately $10m below its previous guidance.