Railcar Manufacturer Acquires Competitor for $400M

Railcars

Oregon railcar and barge manufacturer Greenbrier announced an agreement to acquire Missouri-based American Railcar Industries from its new parent company for an estimated $400 million.

ARI, which was bought by investment firm ITE Management in December for an undisclosed price, produces railcars and components, in addition to offering leasing and repair services. Greenbrier officials said the acquisition would broaden its product lineup and add complementary designs to its operations.

Greenbrier Chairman and CEO William Furman called the deal “a unique opportunity for Greenbrier to extend its position as a global leader in railcar manufacturing” in the announcement. He expects the combination to increase the company’s domestic production and enable an expansion of its U.S. workforce.

The agreement includes two ARI railcar factories in Arkansas and five other component facilities that produce axles, castings, hopper car outlets, railcar running boards, and tank car valves.

Greenbrier will primarily pay cash considerations for ARI, but the deal also includes $30 million for capital expenditures — particularly in ARI’s railcar lining operations — and $50 million in convertible notes issued to ARI. Net tax benefits to Greenbrier are expected to total $30 million.

Image Credit: American Railcar Industries

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