AITX Acquires The Andersons, Inc. Railcar Leasing Unit for $0.55B, CashWritten by William C. Vantuono, Editor-in-Chief
The Andersons, Inc. has sold its railcar leasing business to American Industrial Transport, Inc. (AITX) for approximately $550 million in cash, and also intends to sell off its remaining railcar repair business, including 29 U.S. facilities, as part of a “strategic decision” to jettison all its railcar interests and focus on its agricultural businesses, which include commodity trading, ethanol and plant nutrient sectors.
The Andersons, founded in 1947, said it expects to use the sale proceeds “initially to pay down debt, while maintaining a disciplined approach to future growth investments and returning cash to shareholders.”
AITX, an affiliate of ITE Management L.P., provides railcar leasing, repair and data services to the freight shipping industry. The company is an asset manager targeting transportation and industrial assets and companies and related industries and services.
BofA Securities is serving as financial advisors to The Andersons, Inc., with Dentons acting as legal counsel. Agentis Capital is serving as a financial advisor to AITX, with Willkie Farr & Gallagher LLP and Vedder Price acting as legal counsel.
“The railcar leasing business has been a successful and consistent cash flow generator for The Andersons,” said President and CEO Pat Bowe. “The strategic decision to sell the leasing business allows us to focus on and invest in our agricultural segments to leverage our core strengths. It also will improve our balance sheet, thereby enabling us to redeploy capital in a manner that will enhance shareholder returns. “While we intend to divest our Rail segment in its entirety, we will continue normal operations of our repair and service business as we conduct a sale process.”
“We are pleased to expand the breadth and depth of our railcar leasing platform and the services AITX can provide,” said Jason Koenig, Managing Partner at ITE and member of the AITX Board of Directors. “AITX expects to hire a majority of The Andersons employees in the railcar leasing business, and we are pleased to welcome aboard our new team members. With our more diversified fleet offering and best-in-class repair network, AITX customers now have greater flexibility to meet their rail shipping, servicing and data needs.” “The employees involved are among the most skilled and experienced in the railcar leasing industry, and they have been critical to our success,” commented Joe McNeely, President, The Andersons Nutrient and Industrial business. “We deeply value their contributions and thank them for their commitment to The Andersons. We’re determined to make their transitions as smooth as possible.”