The freight railway owner and operator will be taken private once the transaction, which includes debt, closes later this year or in early 2020.
Brookfield Infrastructure Partners, GIC and Brookfield institutional partners have agreed to purchase freight railway owner and operator Genesee & Wyoming (G&W) in a transaction valued at about $8.4 billion including debt.
The deal, which was announced Monday, is expected to close later this year or in early 2020 and would result in G&W becoming privately held. The transaction is subject to approval by G&W stockholders holding 66.66% of the outstanding common stock along with regulatory and certain competition and antitrust approvals.
Pursuant to the agreement, each issued and outstanding share of G&W will be converted into the right to receive $112 per share in cash, which represents a 39.5% premium to the unaffected per share price of $80.28 on March 8, the “day prior to initial media speculation of a potential transaction,” according to the announcement.
Toronto-based Brookfield Infrastructure investment will be about $500 million of equity funded from existing liquidity, which totaled approximately $1.9 billion on Sunday. The remainder of the business will be owned by Brookfield Infrastructure’s institutional partners and GIC, a Singaporean sovereign wealth fund.
Darien, Conn.-based G&W owns or leases 120 freight railroads organized in eight locally managed operating regions. Its six North American regions serve 41 U.S. states and four Canadian provinces and include 114 short line and regional freight railroads with more than 13,000 miles of track. Its U.K./Europe region includes the United Kingdom’s largest maritime intermodal operator and second-largest freight rail provider, and its Australia region serves New South Wales, the Northern Territory and South Australia and operates the 1,400-mile Tarcoola-to-Darwin rail line.
G&W subsidiaries and joint ventures also provide rail service to more than 40 ports, rail-ferry service between the U.S. Southeast and Mexico, transload services, contract coal loading and industrial railcar switching and repair.
“This is a rare opportunity to acquire a large-scale transport infrastructure business in North America,” said Sam Pollock, CEO of Brookfield Infrastructure. “G&W will be a significant addition to our global rail platform and will expand our presence in this sector to four continents. G&W provides critical transportation services to more than 3,000 customers, and its cash flows have proven to be highly resilient over many years. Brookfield Infrastructure is well suited to work with the company to continue to improve the business, given our significant experience owning and operating rail, ports and other large-scale transportation infrastructure businesses.”