Greenbrier Companies, Inc.’s $430 Million Acquisition of the Manufacturing Business of American Railcar Industries


BofA Merrill Lynch and Goldman Sachs & Co. LLC are serving as financial advisors to Greenbrier. Willkie represented leading railcar designer and manufacturer American Railcar Industries, Inc. on the sale

The Greenbrier Companies, Inc. (NYSE: GBX) 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 Arkansas and 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.

TE Management, an affiliate of ITE Rail Fund L.P., is an investment firm targeting industrial and transportation assets and companies, and related industries and services. ITE Management’s investment strategies focus on broad macro-economic themes. Based in Lake Oswego, Oregon, the Greenbrier Companies is a leading international supplier of equipment and services to the freight rail transportation markets.

The Willkie deal team on the current transaction was led by partners William Gump (Picture) and Bradley Friedman and included partners Eugene Chang and Wesley Powell and associate Justin Sommerkamp.

Involved fees earner: Eugene Chang – Willkie Farr & Gallagher; Bradley Friedman – Willkie Farr & Gallagher; William Gump – Willkie Farr & Gallagher; Wesley Powell – Willkie Farr & Gallagher; Justin Sommerkamp – Willkie Farr & Gallagher;

Law Firms: Willkie Farr & Gallagher;

Clients: American Railcar Industries, Inc.;

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Author: Ambrogio Visconti