Tuesday, December 12, 2017

Spin-off for Trinity infrastructure unit

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Railcar builder Trinity Industries announced it would sell its infrastructure-related business to shareholders as part of a strategy for future growth, and spend $500 million to buy back shares.

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https://www.youtube.com/watch?v=7s8eBjBAyY8

The spin-off, which was approved by Dallas-based Trinity’s Board of Directors, creates two separate public companies “that will benefit from leading positions in their respective industries, strong free cash flow generation, and compelling growth opportunities,” the company said in a release.

Each company will have distinct corporate strategies and capital allocation priorities. The TrinityRail® business of manufacturing, leasing, and services is expected to generate stable cash flows and earnings growth opportunities throughout the manufacturing cycle, “giving the company an ability to pursue an optimized capital structure, efficiently allocate capital, and effectively leverage its multiple rail platforms.”

The new infrastructure company will be growth-oriented, focused on infrastructure-related products and services in construction, energy, and marine markets throughout North America. Trinity said the company will also pursue growth through acquisitions “and to capitalize on the large and growing market opportunity in North American infrastructure spending.”

The spin-off is expected to be completed in the second half of 2018.

“We believe establishing two separate, independently focused public companies will allow each company to more closely align its strategic objectives and capital allocation priorities,” said Timothy R. Wallace, Trinity’s Chairman, Chief Executive and President, noting “the opportunities and potential shareholder value we are creating by reconfiguring our portfolio of market-leading industrial companies.”

The company also declared a quarterly dividend of 13 cents per share, payable Jan. 31, 2018 to stockholders of record on Jan. 12, 2018.

 

 

 

 

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