Investment group buys Texas short-line operator G&W
June 24th, 2019
Updated July 5, 2019 - Bloomberg.com / TRA Newswire -
An affiliate of Brookfield Asset Management Inc. agreed to buy Genesee & Wyoming Inc. for about $6.3 billion, expanding its global portfolio of rail companies with a 120-line network spanning North America, Europe and Australia.
Brookfield will pay $112 a share in cash, a 40% premium from G&W’s close on March 8, the last day of trading before Bloomberg News reported that the railroad operator was exploring a possible sale. The stock rose 8.5% to $108.46, an all-time high, at 9:54 a.m. Monday in New York.
The deal is valued at $8.4 billion including debt, the companies said in a statement. The transaction is expected to close in early 2020.
Genesee & Wyoming has short-line railroads in Texas that will be part of the buyout. G&W operates the Dallas, Garland and Northeastern Railroad (DGNO), Kiamichi Railroad in Texas and Oklahoma (KRR) and Texas Northeastern Railroad in northeast Texas (TNER). G&W also operates port railroad facilities known as Corpus Christi Terminal Railroad (CCPN), Galveston Railroad (GVSR) and the Port Comfort and Northern Railroad (PCN) that serves Port Lavaca, Texas.
“The transaction announced today unlocks the significant shareholder value that GWR’s management team has built over many years, both through acquisitions and operational execution,” Blue Harbour managing director Robb A. LeMasters said in a statement. Blue Harbor began investing in G&W last year, when the stock traded at about $75 a share, he said.
The railroad operator controls small connecting lines that don’t compete directly with the largest North American railroads, such as Union Pacific Corp., CSX Corp. and Canadian National Railway Co. It has operations in Australia, the U.K. and continental Europe, as well.
G&W had climbed 35% this year through Friday, compared with a 17% gain for the Standard and Poor’s Midcap 400 Index. The stock is valued at 23 times estimated earnings, compared with the industry gauge, which is trading at 16.6 times.
G&W got its start in the 19th century as a 14-mile rail spur built to serve a salt mine in upstate New York. After the U.S. railroad industry was deregulated in 1980s, the company began snapping up short lines across the country and expanded into Australia in the late 1990s. G&W now owns or leases 120 freight railroads worldwide and has 8,000 employees.
Read more: https://finance.yahoo.com/news/brookfield-buys-rail-operator-genesee-113711574.html
An affiliate of Brookfield Asset Management Inc. agreed to buy Genesee & Wyoming Inc. for about $6.3 billion, expanding its global portfolio of rail companies with a 120-line network spanning North America, Europe and Australia.
Brookfield will pay $112 a share in cash, a 40% premium from G&W’s close on March 8, the last day of trading before Bloomberg News reported that the railroad operator was exploring a possible sale. The stock rose 8.5% to $108.46, an all-time high, at 9:54 a.m. Monday in New York.
The deal is valued at $8.4 billion including debt, the companies said in a statement. The transaction is expected to close in early 2020.
Genesee & Wyoming has short-line railroads in Texas that will be part of the buyout. G&W operates the Dallas, Garland and Northeastern Railroad (DGNO), Kiamichi Railroad in Texas and Oklahoma (KRR) and Texas Northeastern Railroad in northeast Texas (TNER). G&W also operates port railroad facilities known as Corpus Christi Terminal Railroad (CCPN), Galveston Railroad (GVSR) and the Port Comfort and Northern Railroad (PCN) that serves Port Lavaca, Texas.
“The transaction announced today unlocks the significant shareholder value that GWR’s management team has built over many years, both through acquisitions and operational execution,” Blue Harbour managing director Robb A. LeMasters said in a statement. Blue Harbor began investing in G&W last year, when the stock traded at about $75 a share, he said.
The railroad operator controls small connecting lines that don’t compete directly with the largest North American railroads, such as Union Pacific Corp., CSX Corp. and Canadian National Railway Co. It has operations in Australia, the U.K. and continental Europe, as well.
G&W had climbed 35% this year through Friday, compared with a 17% gain for the Standard and Poor’s Midcap 400 Index. The stock is valued at 23 times estimated earnings, compared with the industry gauge, which is trading at 16.6 times.
G&W got its start in the 19th century as a 14-mile rail spur built to serve a salt mine in upstate New York. After the U.S. railroad industry was deregulated in 1980s, the company began snapping up short lines across the country and expanded into Australia in the late 1990s. G&W now owns or leases 120 freight railroads worldwide and has 8,000 employees.
Read more: https://finance.yahoo.com/news/brookfield-buys-rail-operator-genesee-113711574.html