The Greenbrier Companies, a company based in Lake Oswego, Oregon that specializes in rail freight products, has tentatively agreed to acquire American Railcar Industries, according to the company.
ARI has two plants in Northeast Arkansas in Paragould and Marmaduke.
The gross purchase price of the manufacturing business totals $430 million. Included 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.
The transaction is subject to regulatory reviews and approvals. After receiving the required approvals, Greenbrier officials expect the deal to close sometime in 2019.
“We expect the acquisition to be meaningfully accretive and position Greenbrier for 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.”
How this could impact workers or operations in Northeast Arkansas is unclear. About 1,000 workers are employed in those two plants, according to the latest figures released by the company. It’s headquartered in St. Charles, Mo.
ARI has operated a freight car assembly plant in Paragould since 1995. It opened a second plant in Marmaduke in 1999.
Greenbrier is an 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. The company is a provider of freight railcar wheel services, parts, repair, refurbishment and retrofitting services in North America through our wheels, repair and 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, the company produces 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.