Arad, October 13, 2016 – The Greenbrier Companies, Inc. (NYSE: GBX) and AstraRail
Management GmbH today announced plans to form a new company, Greenbrier-AstraRail, that will create an end-to-end, Europe-based freight railcar manufacturing, engineering and repair business. The combined enterprise will be formed between Greenbrier’s European operations headquartered in Swidnica, Poland and AstraRail based in Germany and Arad, Romania. It will be led by an experienced Europe-based management team from both companies. Greenbrier-AstraRail will offer manufacturing and service capability in Europe with greater scale and efficiency for current customers. It also provides the opportunity to pursue growth in railcar markets in the Gulf Cooperation Council (GCC) nations and Eurasia. As partial consideration for its majority interest, Greenbrier will pay AstraRail €30 million at closing and €30 million 12 months after closing. Greenbrier expects the transaction to be accretive to earnings per share by the end of fiscal year 2017.
Greenbrier-AstraRail will be controlled by Greenbrier with an approximate 75% interest. AstraRail’s Chairman Thomas Manns will own the remainder of the new company. In addition to his ownership stake, Manns will become Chairman of the Supervisory Board of Greenbrier-AstraRail and will lead the new company’s commercial operations, working closely with its Management Board and Jim Cowan, President of Greenbrier International. Also serving on the Supervisory Board will be Bill Furman, Chairman and CEO of Greenbrier; Alejandro Centurion, President of Greenbrier Global Manufacturing Operations; and Cowan. Daily operations will be led by a Management Board including Bernd Böse, CEO of AstraRail, who will become CEO and President, and Bogdan Lesnianski, CFO and the head of Greenbrier’s Wagony Swidnica operations, who will become CFO. The leadership team has decades of experience in railcar markets throughout Eastern and Western Europe, as well as experience in emerging markets around the world.
Greenbrier-AstraRail will include all European operations of Greenbrier and AstraRail. Currently, Greenbrier and AstraRail each operate three locations performing new railcar manufacturing, engineering and repair services. Greenbrier’s sites are in Poland and AstraRail’s sites are in Romania. Greenbrier also maintains a sales office in Germany. Additionally, AstraRail performs railcar design at a facility in Slovakia. Contracts with GCC-based customers for USstyle freight railcars will continue to be designed and manufactured under the direction of Greenbrier’s senior US manufacturing team. The new company will offer premier freight railcar sales, manufacturing and repair operations on the European continent. The railcar fleet in Western Europe is aging, with an average age of 25 years. This replacement demand, combined with anticipated growth in Europe and opportunities in nearby emerging markets, positions Greenbrier-AstraRail for success.
Furman said, “Greenbrier is committed to pursuing strategic opportunities for growth afforded by shifts in global demand for railcars. Greenbrier-AstraRail extends our core competency in freight railcar building, aftermarket services and engineering for all railroad gauges, with a network spanning from North and South America to all of Western Europe, the GCC and Eurasia. This will be a significant and positive step in our strategy for diversification, and AstraRail is a great partner. They bring new products to us as we do to them, and our present businesses are not directly competitive. Combining the Greenbrier Europe operations with AstraRail’s manufacturing and design capabilities and strong management team will be a benefit to our shared European railcar customers by creating a more efficient and responsive manufacturer that offers a broad range of products. The combined enterprise will bring increased scale in Europe. Importantly, it also will bring the capability to serve new global markets in places of increasing demand.”
Furman continued, “Coupled with our investments in Saudi Arabia, Brazil and Mexico, Greenbrier has grown its international footprint and created a global network. We are capable of supporting many markets from our global facilities, including an expanded platform in Europe, as we engage developing markets in the GCC, Africa and Eurasia. We believe there are significant future opportunities in international markets. Our integrated business model ensures we are well positioned to help customers globally with rail solutions.”
Commenting on the formation of Greenbrier-AstraRail, Manns said, “By combining the European operations of Greenbrier and AstraRail, we will create a company that will be stronger and more able to pursue future growth opportunities in the European region and beyond. This combination will expand our base of executive talent and will grow our engineering and technical resources for the support and development of freight railcar manufacturing and services throughout the world. I look forward to leading the team to future success, along with Bernd Böse and Bogdan Lesnianski, as well as fellow Greenbrier-AstraRail Directors Bill Furman, Alejandro Centurion, and Jim Cowan.”
Greenbrier-AstraRail will be headquartered in the Netherlands and will have principal operations in Poland and Romania. Greenbrier-AstraRail will have nearly 4,000 employees and 6 production and repair facilities across Europe.
Closing of the transaction is contingent on, among other conditions, achieving antitrust approval in certain EU countries.
Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry. Greenbrier builds new railroad freight cars in manufacturing facilities in the U.S., Mexico and Poland and marine barges at our U.S. manufacturing facility. Greenbrier sells reconditioned wheel sets and provides wheel services at locations throughout the U.S. We recondition, manufacture and sell railcar parts at various U.S. sites. Through GBW Railcar Services, LLC, a 50/50 joint venture with Watco Companies, LLC, freight cars are repaired and refurbished at over 30 locations across North America, including more than 10 tank car repair and maintenance facilities certified by the Association of American Railroads. Greenbrier owns a lease fleet of over 9,000 railcars and performs management services for over 268,000 railcars.
In 1998, Thomas Manns, at the young age of 21, stepped in to run his family’s business of commercial vehicle rentals upon the death of his father. He built that company into a major force in Western and Eastern European markets. After selling the business in 2008, Mr. Manns entered the real estate business in Eastern Europe and Germany. In 2012, he purchased AstraRail properties and together with Mr. Bernd Böse, who runs the operative business of AstraRail, built the multi-plant business into a highly profitable operation with three manufacturing, engineering and repair factories in Arad, Severin and Caracal, Romaniaover the course of a few short years.