Genesee & Wyoming acquires Freightliner for £490m

Genesee & Wyoming announced that it has agreed to acquire approximately 95% of the shares of Freightliner Group Limited from Arcapita, an international investment firm based in Bahrain, and other shareholders for cash consideration of approximately £490m. Members of the existing Freightliner management team will retain an approximate 5% ownership interest with Genesee & Wyoming to own 100% by mid-2020. The acquisition is expected to close during the first quarter of 2015.

Headquartered in London, UK, Freightliner is an international freight rail operator with operations in the UK, Poland, Germany, the Netherlands and Australia.

Jack Hellmann, President and Chief Executive Officer of Genesee & Wyoming said, “The acquisition of Freightliner is an excellent strategic fit for G&W. First, we are adding a world class intermodal and heavy haul franchise in the UK that will be the foundation of G&W’s European Region. Second, the overlap of our respective rail businesses in Australia and the Netherlands will unlock operating synergies and expand our presence in each of those markets. Third, we are pleased to be joined by a highly talented management team who have a long track record of success in building Freightliner over the past two decades.”

After the acquisition Genesee & Wyoming will be left with North America, Europe and Australia as three distinct and major areas of operation. The North American business is expected to make up approximately 77% of operating income while Australia should account for 12% and Europe 11%.

Russell Mears, Chief Executive Officer of Freightliner Group commented, “Genesee & Wyoming brings additional investment firepower, extended international reach and increased below rail infrastructure expertise to add to the existing strengths of the Freightliner Group.”

The company plans to finance the acquisition of Freightliner through an amendment to its existing credit facility, with approximately $650m from the issuance of new term loans and the remainder from funds drawn on its existing revolver.

During its first year of ownership, Genesee & Wyoming expects Freightliner to generate approximately £510m in revenues and £60m of EBITDA, which includes annual operating lease expense of £45m.


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