Trinity Industries on Nov. 3 reported entering into a definitive agreement to sell its highway products business to Monomoy Capital Partners for $375 million in cash; the move will allow Trinity to “fully focus” on its rail-related business.
Trinity said the deal with Monomoy, a New York City-based middle-market private equity fund, is expected to close in fourth-quarter 2021, subject to customary closing conditions and adjustments and regulatory approval. The highway products business “works with state highway departments and contractors to provide highway guardrails, crash cushions, truck-mounted attenuators, flexible post delineators, traffic control barriers and a variety of proprietary roadside products,” according to Dallas, Tex.-based Trinity.
J.P. Morgan Securities LLC and Akin Gump Strauss Hauer & Feld LLP are serving Trinity as the exclusive financial advisor and legal advisor, respectively, for the transaction.
“We continue the process to optimize our business and believe that selling the highway products business will allow us to fully focus on the rail-related segments,” Trinity President and CEO Jean Savage said. “Trinity’s long history in the North American rail industry gives me great confidence that focusing our attention and resources on this industry will allow us to meet our long-term financial and operational goals and continue to optimize our capital structure.
“Our highway business has been performing well and the bid process was competitive, which allowed us to find the right buyer for the business and deliver a great outcome for our shareholders. I want to thank our employees in highway products for their hard work and contributions to Trinity, and wish them continued success as they grow on a stand-alone basis.”
Upon the transaction’s close, Trinity said it would “report the results of its highway products business, currently included in the ‘All Other’ segment, as part of discontinued operations. This includes any gains recognized on the sale of the business. Use of proceeds from the sale will flow through the company’s capital allocation framework, and Trinity expects to return a significant portion of proceeds to shareholders.”