Icahn to sell American Railcar to Japanese bank

Billionaire Carl Icahn’s investment firm has agreed to sell the rail equipment manufacturer to a Chicago-based subsidiary of Japan’s Sumitomo Mitsui Financial Group in a deal that could be worth up to $3.36 billion, the company said in a statement.    Billionaire activist investor Carl Icahn’s Icahn Enterprises LP has agreed to sell wholly owned subsidiary American Railcar Leasing LLC (ARL) to SMBC Rail Services LLC, a subsidiary of Japan’s Sumitomo Mitsui Financial Group.
   The all-cash deal for the rail equipment manufacturer includes an enterprise value of $2.78 billion and around 29,000 railcars with an option for an additional 4,800 railcars for $586 million, bringing the total potential value to $3.36 billion, according to a statement from the firm.
   Icahn Enterprises said it expects the transaction, which is still subject to regulatory approval, to close in the second quarter of 2017.
   Headquartered in Chicago, SMBC Rail was created from the former Flagship Rail Services LLC after its purchase by Sumitomo Mitsui, one of the largest banks in Japan.
   The railcar lessor said in a statement its purchase of ARL will create a “premier full service lessor of long-lived rolling stock, offering comprehensive rail leasing solutions in North America, with a combined fleet of approximately 50,000+ railcars that are positioned to carry a wide variety of commodities and serve a broad range of industries, including energy, steel, agriculture, petrochemical and consumer goods.”
   “The combined fleets of SMBC Rail and ARL is an example of two complementary businesses coming together to provide better solutions for our customers,” said Gene Henneberry, president and chief executive officer of SMBC Rail. “This portfolio will be one of, if not the youngest, most efficient, diversified fleets in the industry.”
   “I have been in the railcar business for over 30 years. During that time, we have built one of the leading railcar fleets in the world,” Icahn said of the sale. “In fact, if lined up, ARL’s fleet would stretch from New York City to the middle of Ohio. I am very proud of the business we have built at ARL and am pleased that SMBC Rail Services also sees the tremendous value in this business.”
   Deutsche Bank Securities Inc. is acting as exclusive financial advisor to American Railcar Leasing LLC in connection with the sale and Thompson Hine LLP is acting as legal counsel.
   Bank of America Merrill Lynch and SMBC Nikko Securities America, Inc. are acting as exclusive financial advisors to SMBC Rail; and Skadden, Arps, Slate, Meagher & Flom, LLP, and Chapman and Cutler LLP are acting as legal advisors.