An affiliate of investment firm ITE Management L.P. (ITE) has agreed to acquire North American rolling stock lessor SMBC Rail Services LLC from SMBC Americas Holdings, Inc., a member of Sumitomo Mitsui Financial Group (SMBC Group), the companies reported Nov. 7.
The transaction is subject to customary conditions to closing, including receipt of regulatory approvals.
Following the closing, SMBC Rail Services railcars and “certain other assets” are expected to be transferred to American Industrial Transport, Inc. (AITX), a railcar leasing and repair and maintenance provider with headquarters in St. Charles, Mo., according to ITE and Tokyo-based SMBC Group.
“Today, we are thrilled to announce the agreement to acquire SMBC Rail Services, LLC by an affiliate of ITE Management, the investment manager of our parent company,” AITX wrote in a LinkedIn post. “This transaction will add over 50,000 railcars to AITX’s leasing fleet, along with an experienced team and long-standing customer relationships to create one of the leading, full-service railcar platforms in North America. This transaction provides our freight shipping customers more options and optimization. Every day we strive to be your trusted partner through our integrated solutions across leasing, repair, fleet management, and railcar data. It’s our mantra to keep our customers and employees ‘Moving Ahead.’ We are proud to have achieved a major milestone in this goal today.”
SMBC Group reported that over the past 10 years, it has “transformed SMBC Rail Services LLC through ongoing fleet reinvestment, repositioning, organic growth, and acquisition,” and now the company’s “diversification strategy across a broad customer base and end markets has accelerated its ability to serve a wider range of clients with enhanced capabilities.” SMBC Rail Services LLC in 2017 acquired American Railcar Leasing LLC.
According to SMBC Group, the divesture supports its “Medium Term Management Plan and commitment to focus on its U.S. business and realize its long-term vision through the reallocation of capital and resources to core growth business areas, including its corporate investment bank; sales and trading division; and its new digital bank, Jenius Bank.”