Watco Companies LLC announced it will acquire for more than $310 million Dow Inc.’s rail infrastructure assets and equipment at six North American locations.
Watco will then provide select rail services at Freeport and Seadrift, Texas; St. Charles and Plaquemine, La.; and Fort Saskatchewan and Prentiss, Alberta.
North America’s largest olefins and polyethylene manufacturer, Dow expects to receive more than $310 million in cash as part of the transaction, which is expected to close in the fourth quarter pending customary closing conditions.
As part of the agreement, it is expected that 14 Dow employees and the management responsibility for about 400 contract workers will transition to Watco. For Dow the deal aligns with its corporate strategy to grow its core businesses.
Watco partnered with the transportation infrastructure group that manages an infrastructure investing strategy and funds for Oaktree Capital Management L.P. to execute the deal.
“This represents a revolutionary approach to industrial in-plant rail operations and we’re proud to help Dow create value for many years to come,” Watco CEO Dan Smith said in a press release.
“The transaction will liberate cash from our balance sheet that we will use to pay down debt and invest in our core value-generating businesses,” said Dow Chairman and CEO Jim Fitterling.