Progress Rail has sold its Progress Rail Equipment Leasing (PRELC) subsidiary to affiliates of Paceline Equity Partners, a Dallas-based private equity manager.
PRELC offers an extensive fleet of railway infrastructure maintenance equipment for tasks such as sleeper replacement, ballast adjustments, rail grinding and resurfacing, switch modifications, and bridge inspection and test work. Equipment leasing is complemented by an in-house maintenance operation.
The terms of the transaction were not disclosed.
“As a leading supplier to the global rail industry, we continuously review our business for overall efficiency and competitiveness,” said John Newman, executive vice president of infrastructure for Progress Rail. “After evaluating our maintenance of way (MoW) leasing business, we believe it will benefit the company to take these steps to be more efficient in the near term and more competitive long term. While we are exiting the MoW equipment leasing business, Progress Rail will continue to produce Kershaw MoW and vegetation management equipment.”
“PRELC represents an ideal opportunity for Paceline to invest in an asset-rich operating platform with strong and stable cash flows,” said Sam Loughlin, CEO of Paceline. “Non-discretionary demand stemming from the need to maintain America’s railroad infrastructure remains robust and we expect this business to perform well across various economic cycles, particularly during today’s late-stage economic cycle.”
PRELC is headquartered outside of Detroit, Mich., with an office in St Louis, Miss.