FreightCar America buys DTE Rail Services
USA: FreightCar America announced on September 8 that it had signed an agreement to acquire the DTE Rail Services subsidiary of DTE Energy for $23·2m. Completion is expected early in the fourth quarter of 2010, with the acquired business to be known as FreightCar Rail Services.
DTE Rail Services has 130 staff and operations in Colorado, Indiana and Nebraska, maintaining wagons and block coal trains on key rail corridors in the midwest and western USA. Its annual revenues are around $25m.
FreightCar America said the acquisition would expand its parts and repair capabilities as part of a strategy for growth in the wagon services sector. This will 'diversify our revenue sources and will serve to lessen the cyclicality of our earnings', according to President & CEO Ed Whalen. 'We expect that this addition will expand our customer base and strengthen existing relationships by significantly enhancing the company's involvement in the entire railcar life cycle. The company will be well positioned to service coal -carrying railcars moving through the Powder River Basin in the western United States. A majority of these coal cars were manufactured by FreightCar America.'