U.S. railcar manufacturer and lessor Greenbrier (NYSE: GBX) finalized its acquisition of the manufacturing business of American Railcar Industries (ARI) from ITE Management, the company said on July 28.
Greenbrier said the acquisition, which was announced in April and finalized on July 26, will enable Greenbrier’s to provide customers not only with direct sales or leasing options but also with after-market services. Customers seeking tank cars and covered hoppers will also benefit from Greenbrier’s expanded geographic footprint as a result of the acquisition of ARI.
“Acquiring the manufacturing operations of ARI is a major milestone for Greenbrier. The transaction advances three of our strategic goals: strengthening our presence in the North American rail equipment market; growing at scale; and developing a robust talent pipeline,” GBX chief executive officer William A. Furman said. “This is Greenbrier’s greatest expansion effort yet. We value the contributions of employees of both Greenbrier and ARI, our shared customers and other partners who have made this combination possible and who will help us continue to grow.”
Greenbrier’s acquisition comes as railcar manufacturers, including GBX, Trinity Industries (NYSE: TRN) and GATX (NYSE: GATX), are attempting to reposition themselves in a landscape post-precision scheduled railroading (PSR). All of the Class I railroads except BNSF (NYSE: BNSF) have adopted PSR, an operating model that seeks to streamline rail operations and train scheduling. PSR seeks to reduce a railroad’s costs by shedding perceived operational inefficiencies within the railroad’s network.
Greenbrier will continue to work with ITE while adding former ARI chief executive officer John O’Bryan to Greenbrier’s roster. O’Bryan will serve as Greenbrier’s senior vice president of business development and integration, and he will report to Alejandro Centurion, Greenbrier executive vice president and president of global manufacturing operations.
Greenbrier, headquartered in Lake Oswego, Oregon, with other employees located nationwide, will add two railcar manufacturing facilities in Paragould and Marmaduke, Arkansas. The company will also add manufacturing and administrative employees in St. Charles, Missouri, as well as other operations in Jackson and Kennet, Missouri and Longview, Texas.
The company has existing offices in Europe and Brazil. It owns a lease fleet of 10,600 railcars and it services and manages about 375,000 railcars. It reported its third quarter earnings in early July.