Greenbrier to Acquire Manufacturing Business of American Railcar Industries in Transaction Valued at $400 Million

  • Acquisition delivers on three key tenets of strategy:
  • Strengthens domestic core North American markets,
  • Supports development of a deeper talent pipeline, and
  • Grows the business to a larger scale.
  • Expected adjusted diluted earnings per share accretion to exceed 20% during the first 12 months.
  • Free cash flow accretion expected within the first 12 months and subsequently at least $30 million in annual run-rate synergy opportunities.
  • Following the transaction, Greenbrier will have a larger U.S. railcar manufacturing footprint, adding ARI’s two manufacturing facilities in Arkansas. It will employ more U.S. workers at cost competitive and flexible facilities, with a more efficient delivery model throughout North America, due to lower transportation costs.
  • The combined operations are expected to bring a broader freight railcar portfolio, as well as manufacturing efficiencies and cost savings from vertical integration.

The Greenbrier Companies, Inc. (NYSE: GBX) (the "Company") today announced that it has entered into an agreement to acquire the manufacturing business of American Railcar Industries (ARI) from ITE Management LP (ITE) in a transaction valued at $400 million, after adjustments for net tax benefits accruing to the Company, valued at $30 million.  The gross purchase price of the manufacturing business totals $430 million.  Included in the gross purchase price is $30 million for capital expenditures on railcar lining operations and other facility improvements at ARI.  Also included in gross purchase price are convertible notes issued by Greenbrier to ARI in the principal amount of $50 million.  The balance of the gross purchase price is cash consideration.  Headquartered in St. Charles, Missouri, ARI was acquired by ITE in December 2018. 

The acquisition will diversify Greenbrier's American manufacturing presence, as well as broaden its product offerings with the addition of complementary designs.  Greenbrier will acquire two railcar manufacturing facilities in Arkansasand five other operations that provide a range of railcar component and parts supply.  These operations build hopper car outlets, tank car valves, axles, castings and railcar running boards, among other ancillary railcar products.  Significant manufacturing efficiencies and cost savings are expected from the acquisition, along with a skilled workforce and geographic advantages throughout North America. 
"We expect the acquisition to be meaningfully accretive and position Greenbrierfor growth in our core manufacturing and engineering business in North America.  Cost synergies and economies of scale are expected to benefit our customers, including shippers, leasing companies and North American railroads," said William A. Furman, Chairman and CEO.  "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 U.S.-based production and an expansion of our American-based workforce.  We are especially pleased to work with ITE on this acquisition, since we already enjoy a strong relationship with them as a valued syndication customer."

The acquisition is expected to:
  • Strengthen core North American product base through complementary and supplementary railcar and component offerings, including vertical supply chain benefits.
  • Enhance production footprint to better serve a geographically diverse customer base.
  • Provide new cost-saving opportunities through use of best practices, increased vertical integration, maximized production runs, improved supply chain efficiencies and lower transportation costs to key markets.
  • Increase railcar offerings with access to vertically integrated parts and components.
  • Broaden the customer base capitalizing on non-overlapping relationships with strategic operating lessors, Class I and short line railroads and shippers.
The transaction is subject to customary regulatory reviews and approvals.  After receiving the required approvals, Greenbrier expects the deal to close in calendar 2019.

 BofA Merrill Lynch and Goldman Sachs & Co. LLC are serving as financial advisors to Greenbrier. 
About Greenbrier
Greenbrier, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Greenbrier designs, builds and markets freight railcars and marine barges in North America. Greenbrier Europe is an end-to-end freight railcar manufacturing, engineering and repair business with operations in Poland, Romania and Turkey that serves customers across Europe and in the nations of the Gulf Cooperation Council. Greenbrier builds freight railcars and rail castings in Brazil through two separate strategic partnerships. We are a leading provider of freight railcar wheel services, parts, repair, refurbishment and retrofitting services in North America through our wheels, repair & parts business unit. Greenbrier offers railcar management, regulatory compliance services and leasing services to railroads and related transportation industries in North America. Through unconsolidated joint ventures, we produce industrial and rail castings, tank heads and other components. Greenbrier owns a lease fleet of 10,600 railcars and performs management services for 372,000 railcars. Learn more about Greenbrier at

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