Acquisitions · Railcar leasing
SMBC to buy Icahn's American Railcar Leasing for $2.8 billion
- Buyer
- Sumitomo Mitsui Banking Corp. (via SMBC Rail Services) (Tokyo)
- Target
- American Railcar Leasing, St. Charles, Missouri
- Value
- Enterprise value of $2.778B (subject to adjustment)
- Status
- Announced on December 19, 2016; the initial closing was planned for the second quarter of 2017.
- Date
- 2016-12-19
Sumitomo Mitsui Banking Corp. agreed to buy American Railcar Leasing, based in St. Charles, Missouri, from Icahn Enterprises through its subsidiary SMBC Rail Services. The enterprise value was $2.778 billion, subject to adjustment. The fleet has about 29,000 railcars, and SMBC also took an option on about 4,800 more.
Why it matters
The deal makes SMBC a major owner of US railcars, a leasing asset with long, steady contracts, adding to its aircraft and other leasing businesses.
The option on more railcars
For three years, and once certain conditions are met, the sellers can sell and SMBC Rail can buy about 4,800 more railcars. At the initial closing those cars would cost about $586 million, which would bring the total to $3.364 billion, subject to adjustment. Neither the sale nor the option had a financing condition.
Closing conditions
The sale required the end of the US antitrust waiting period and other customary conditions. Deutsche Bank Securities was the exclusive financial adviser and Thompson Hine was legal counsel to American Railcar Leasing. Carl Icahn said that if lined up, the fleet would stretch from New York City to the middle of Ohio.
Sources
Kakehashi M&A News home
