Regulatory Information 2022-03-30
Ratos has signed an agreement to acquire 74% of the Swedish company NVBS Rail Group Holding AB (NVBS), which in turn has signed an agreement to acquire 100% of the Finnish company Ratatek. NVBS will become a Nordic platform company for Ratos in the attractive and growing railway infrastructure market, with a presence in Sweden, Finland and Norway. Together, the companies had pro forma revenues of SEK 978m in 2021, with adjusted EBITA of SEK 113m. The cash-free, debt-free purchase price for 100% of both companies amounts to SEK 1,066m. NVBS will belong to Ratos business area Construction & Services.
“Maintenance and upgrades of critical infrastructure is an attractive and growing niche in which Ratos established a position in road maintenance in 2021. With the acquisition of NVBS, we are now broadening our offering into the expanding railway market – a market where NVBS and Ratatek have excellent prospects for continued organic and acquisition-driven expansion,” says Christian Johansson Gebauer, President Business Area Construction & Services at Ratos.
NVBS is a fast-growing player in maintenance, improvement and construction of critical railway infrastructure in Sweden and Norway. The company specialises in rail-related services, including groundwork, track, electrical, signal and telecom. Through a strong focus on efficient operations and meeting the customer’s expectations, NVBS reported an organic compound annual growth rate (CAGR) of 30% between 2019 and 2021. The company had pro forma revenues of SEK 719m in 2021, with adjusted EBITA of SEK 85m.
Ratatek specialises in the design, installation and maintenance of overhead contact lines and electrical systems on tram and railways, with operations in Finland and Sweden. The company already has a successful partnership with NVBS in the Swedish market. Ratatek’s key personnel will be part of the owner group in NVBS in conjunction with the transaction. Ratatek had sales of EUR 25.5m in 2021, with adjusted EBITA of EUR 2.7m.
“With the acquisition of NVBS, Ratos has secured a majority shareholding in one of the Nordic region’s fastest-growing players within railway infrastructure. We are impressed with NVBS’s culture, entrepreneurial spirit and decentralised governance model, which has enabled the company’s rapid growth. The fact that the founders and key personnel of NVBS have chosen to retain a holding of 26% is very positive, and we look forward to building a strong Nordic market challenger together,” continues Christian Johansson Gebauer.
“Since 2012 when NVBS was founded it has established a strong position as a fast-growing contractor specialising in railway environments with a focus on profitable growth in the Swedish market. With Ratos as our new principal owner, we can now take the next step in our growth journey, and we see significant opportunities to expand our business model to new geographic areas,” says David Skalin, President and CEO of NVBS.
“The acquisition of NVBS and Ratatek is an excellent match for the business area and will also contribute to, and themselves be able to leverage, soft synergies with other companies,” says Jonas Wiström, President and CEO of Ratos.
Acquisition financing and valuation and impact on Ratos
NVBS and Ratatek had pro forma sales of SEK 978m in 2021, with adjusted EBITA of SEK 113m. The cash-free, debt-free purchase price (enterprise value) for 100% of the shares in both companies amounts to SEK 1,066m, corresponding to an EV/EBITA multiple of 9.4x for the full-year 2021. The acquisition was financed with Ratos’s own funds and bank financing. The founders have chosen to remain as owners of NVBS in conjunction with Ratos’s acquisition, with a holding amounting close to a quarter of the shares in the company. After a certain period of time and at the earliest in full after seven years, both the founders and Ratos have a customary right to demand that Ratos acquire the shares at market value.
For the Ratos Group, the acquisition corresponds to a pro forma increase in sales of just over 4% and an increase of nearly 7% in EBITA for full-year 2021. The Ratos Group’s leverage in December 2021 amounted to 0.2x EBITDA and increase pro forma to 0.6x EBITDA.
Terms of the transaction
The acquisition, which is conditional on customary competition clearance, is expected to be completed in May 2022.
For further information:
Jonas Wiström, President and CEO, Ratos, +46 8 700 17 00
Christian Johansson Gebauer, President BA Construction & Services, Ratos, +46 8 700 17 00
Josefine Uppling, VP Communication, Ratos, +46 76 114 54 21
David Skalin, President and CEO, NVBS, +46 763 166 136
This is information that Ratos AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 a.m. CEST on 30 March 2022.
About Ratos
Ratos is a business group consisting of 13 companies divided into three business areas: Construction & Services, Consumer and Industry. In total 2021, the companies have approximately SEK 35 billion in sales. Our business concept is to develop companies headquartered in the Nordics that are or can become market leaders. We enable independent companies to excel by being part of something larger. People, leadership, culture and values are key focus areas for Ratos. Everything we do is based on Ratos’s core values: Simplicity, Speed in Execution and It’s All About People.
Lake State Railway is positioned for significant continued growth with Antin as its strategic partner
Lake State Railway Company (“LSRC”) and Antin Infrastructure Partners (“Antin”, Ticker: ANTIN – ISIN: FR0014005AL0) announced today that LSRC, a Michigan-based regional freight railroad with an impressive track record and runway for continued growth, has received a strategic investment from Antin, one of the world’s leading infrastructure investment firms.
LSRC, formed in 1992, is an approximately 375-mile rail freight network spanning the eastern corridor of Michigan’s Lower Peninsula. The company provides freight transportation, railcar storage, and transloading services. LSRC is a critical component of the North American transportation infrastructure supply chain. Through interconnections with multiple Class I rail partners, LSRC provides bidirectional rail access between Michigan and the broader U.S. and Canadian markets to a diverse set of over 60 customers across a range of durable end markets. In 2021, the company moved over 60,000 carloads. LSRC is a vital contributor to the State of Michigan, one of the fastest growing state economies in the U.S. and one of the largest manufacturing centers in North America. In addition, LSRC’s rail service provides an environmentally friendly shipping option for customers, as freight rail is significantly more fuel efficient than over-the-road alternatives.
The company’s current management team, which has been in place for nearly a decade and will continue to lead the business, has overseen substantial capital investments into the LSRC rail network and, as a result, strong growth in both customer additions and increased traffic. Through the strength of its 135 employees and the leadership of its management team, LSRC was selected as 2018 Short Line of the Year and 2021 Regional Railroad of the Year by Railway Age.
John Rickoff, President and CEO, LSRC, commented: “We welcome Antin as a long-term strategic partner to support our continued growth plans and vision for the future of LSRC. We look forward to working with Antin to grow our customer base and expand our rail network.”
Kevin Genieser, Senior Partner, Antin, stated: “We are excited to partner with LSRC’s management team for the company’s next chapter of growth. Our investment in LSRC is another major milestone for Antin’s franchise in North America, representing our fourth U.S. investment.”
Hamza Fassi-Fehri, Partner, Antin, added: “LSRC builds upon Antin’s global track record of investing in the transportation sector. LSRC’s commitment to customer service and safety, and its consistent network investment has positioned the business to take advantage of attractive market fundamentals and environmental attributes. We look forward to working with LSRC’s management team to further accelerate its growth.”
LSRC was advised by Northborne Partners (financial advisor) and Honigman LLP (legal counsel).
Antin was advised by BMO Capital Markets (financial advisor) and Gibson, Dunn & Crutcher LLP (legal counsel).
About Lake State Railway
Lake State Railway Company is a Michigan-based progressive regional railroad that has been providing “Excellence in Transportation” since 1992. LSRC’s approximately 375 operating miles of track run from Plymouth through its headquarters in Saginaw, up to Bay City, Gaylord and Alpena. Lines also run to Midland and Paines.
About Antin Infrastructure Partners
Antin Infrastructure Partners is a leading private equity firm focused on infrastructure. With over €22bn in Assets under Management across its Flagship, Mid Cap and NextGen investment strategies, Antin targets investments in the energy and environment, telecom, transport and social infrastructure sectors. Based in Paris, London, New York, Singapore and Luxembourg, Antin employs over 165 professionals dedicated to growing, improving and transforming infrastructure businesses while delivering long-term value to investors and portfolio companies. Majority owned by its partners, Antin is listed on compartment A of the regulated market of Euronext Paris (Ticker: ANTIN – ISIN: FR0014005AL0).
Media Contacts
Antin Infrastructure Partners
Nicolle Graugnard, Communication Director
High Speed 1 (“HS1 Limited”), the UK’s high-speed railway link to the Channel Tunnel, majority-owned by funds advised and managed by InfraRed Capital Partners Limited (“InfraRed”), including HICL Infrastructure PLC (“HICL”), has announced a new sustainability strategy with a view to becoming carbon neutral by 2030. As part of this sustainability strategy, the concessionaire for the infrastructure, HS1 Limited is aiming to become the first UK railway to run solely on renewable energy, with trains powered by wind and solar energy. It has now secured the necessary Renewable Electricity Guarantee of Origin (REGO) certificates from its energy supplier, npower, enabling it to report zero-carbon emissions for the electricity used to power trains and stations.
HS1 Limited is also working with its operators, Eurostar and Southeastern High Speed (LSER), to reduce the carbon footprint of every passenger by 25% and to cut energy per train journey by 10% by 2030. HS1 Limited will report progress on its sustainability strategy in its annual report, focusing on the well-defined targets in the priority areas of climate change, energy use, resource use & waste impacts, social impacts, biodiversity and transparency.
Harry Seekings, InfraRed’s Head of Infrastructure, commented: “We commend HS1 Limited on the release of its new sustainability strategy, which clearly articulates the key targets that the company has put in place to achieve its ambitious objective of being the most sustainable option for transport from the UK into Europe. We are looking forward to working with HS1 Limited to support the attainment of these targets, particularly in relation to becoming carbon neutral by 2030, as this closely aligns with InfraRed’s own sustainability objectives, one of which is to support United Nations Sustainable Development Goal (UN SDG) 13 (Climate Action).”
Dyan Crowther, HS1 Ltd’s Chief Executive Officer, added: “HS1 is the Green Gateway to Europe. Through our sustainability strategy we are helping consumers reduce their carbon footprint while still enjoying safe, fast and reliable travel at home and abroad. As the UK’s only high-speed railway, we already deliver phenomenal environmental benefits to the UK and beyond, offering a more environmentally friendly alternative to cars and planes.”
Alongside the carbon emissions already avoided through train travel, HS1’s international high-speed services currently avoid around 750,000 tonnes of carbon dioxide emissions per year compared to air travel, which is the equivalent of 60,000 short-haul flights. Its domestic services remove 6,000 lorries and cars from the roads every year.
For the full version of the HS1 sustainability strategy please follow this link: https://highspeed1.co.uk/about-us/sustainability.
About High Speed 1
HS1 Limited has the 30-year concession to own, operate and maintain High Speed 1 (HS1), the UK’s only high-speed railway, as well as the stations along the route: St Pancras International, Stratford International, Ebbsfleet International and Ashford International.
HS1 is the 109km rail line between St Pancras International in London and the Channel Tunnel and connects the international high-speed routes between London and Paris, London and Brussels and London and Amsterdam, as well as the domestic route from London to Kent.
In July 2017, HS1 Limited was acquired by a consortium comprising of funds advised and managed by InfraRed Capital Partners Limited and Equitix Investment Management Limited.
About InfraRed Capital Partners
InfraRed Capital Partners is an international investment manager focused on infrastructure and real estate. It operates worldwide from offices in London, Hong Kong, New York, Sydney, Seoul and Mexico City. With more than 190 professionals, it manages US$12bn of equity capital in multiple private and listed funds, primarily for institutional investors across the globe. InfraRed Capital Partners is authorised and regulated in the UK by the Financial Conduct Authority.
InfraRed implements best-in-class practices to underpin asset management and investment decisions, promotes ethical behaviour and has established community engagement initiatives to support good causes in the wider community.
InfraRed has been a signatory of the Principles of Responsible Investment since 2011 and has been awarded triple A+ score in 2019 PRI assessment. InfraRed’s sustainability programme is aligned with the United Nations (UN) Sustainable development Goals (SDGs) framework. InfraRed proactively works with its portfolio companies to make a positive contribution to the SDGs they have chosen to support.
Effective from 1 January 2019, InfraRed is a certified CarbonNeutral® company in accordance with The CarbonNeutral Protocol.*
*The CarbonNeutral Protocol was created and is managed by Natural Capital Partners. First developed and published in 2002, The Protocol is revised and updated annually to reflect developments in climate science, international policy, standards and business practice. The Protocol is updated annually with input from an Advisory Council of external experts to ensure it reflects the latest industry and scientific best practice. Further information can be found on the following webpage: www.carbonneutral.com/protocol.
About HICL Infrastructure PLC
HICL Infrastructure PLC (“HICL” or the “Company”, and together with its subsidiaries the “Group”) is a long-term investor in infrastructure assets which are predominantly operational and yielding steady returns. It was the first infrastructure investment company to be listed on the London Stock Exchange.
Further details can be found on the HICL website www.hicl.com
The EQT Infrastructure II fund (“EQT Infrastructure” or “EQT”) today announced that it has entered into a definitive agreement to sell Hector Rail Group (“Hector Rail” or “the Company”) to Ancala’s European Infrastructure Fund II. Founded in 2004 and headquartered in Stockholm, Sweden, Hector Rail is the largest private rail freight operator in Scandinavia with significant operations in Germany.
With a fleet of over 100 locomotives and 400 employees, including approximately 250 train drivers, Hector Rail transports essential goods for a wide range of customers. Hector Rail also operates a growing domestic platform in Germany, the largest rail freight market in Europe, from which it focuses on attractive niche segments, such as energy and intermodal flows.
Since acquired by EQT Infrastructure in November 2014, Hector Rail’s focus has been on driving sustainable growth, expanding into new segments and geographies, and diversifying the customer base while providing environmentally friendly transport solutions. Hector Rail has also executed on an ambitious sustainability agenda by providing essential transportation services to industries in an environmentally sustainable way.
Masoud Homayoun, Partner and Investment Advisor to EQT Infrastructure, adds: “Hector Rail has continued to grow and gain market share while fostering a strong, safety-oriented culture, sustainable operations and high-quality services to all customers. Management and the entire Hector Rail team have done a fantastic job. With the ever-increasing demand for environmentally friendly transport solutions, Hector Rail is well-positioned for continuous growth under Ancala’s ownership”
Claes Scheibe, Managing Director of Hector Rail AB, added: “With the support from EQT, Hector Rail has grown by adding a range of new freight services across the Scandinavian and German rail network, and supported the growth of the European economy through the transportation of essential goods and materials. We continue to see strong demand for our services and look forward to entering the next phase of growth together with our new owners.”
Stig Kyster-Hansen, Managing Director of Hector Rail GmbH, further commented: “Under EQT’s ownership, we have in a short period of time been able to build a strong and scalable platform in Germany. We see great potential for further growth in this market and look forward to continuing our journey together with Ancala”
Deutsche Bank AG acted as financial advisor and Advokatfirman Vinge KB as legal advisors to EQT Infrastructure.
Contact
Masoud Homayoun, Partner and Investment Advisor to EQT Infrastructure, +46 73 402 1081
EQT Press Office, press@eqtpartners.com, +46 8 506 55 334
About EQT
EQT is a differentiated global investment organization with more than EUR 62 billion in raised capital and around EUR 40 billion in assets under management across 19 active funds. EQT funds have portfolio companies in Europe, Asia-Pacific and North America with total sales of more than EUR 27 billion and approximately 159,000 employees. EQT works with portfolio companies to achieve sustainable growth, operational excellence and market leadership.
More info: www.eqtgroup.com
Follow EQT on Twitter and LinkedIn
About Hector Rail
Hector Rail Group is an independent rail freight operator, providing traction and related services across Scandinavia and Germany. We offer environmentally friendly transportation solutions on rail, to industrial companies, forwarders, and other rail operators. The Group consists of Hector Rail AB, Sweden’s largest private rail freight company, and Hector Rail GmbH, a German operator servicing both international traffic to Scandinavia and the domestic German market
More info: www.hectorrail.com
About Ancala Partners
Ancala Partners LLP is an independent infrastructure investment manager focused on delivering enhanced returns from mid-market infrastructure investments across Europe. Ancala adopts a proactive approach to the origination and asset management of investments to create value for its investors.
More info: www.ancala.com
3i-backed Regional Rail, a leading owner and operator of short-line freight railroads and rail-related businesses in the U.S., has agreed to acquire Carolina Coastal Railway, Inc. (“Carolina Coastal”) which operates 180 miles of freight railroad in North Carolina and South Carolina, subject to authorisation from the Surface Transportation Board.
Carolina Coastal provides freight transportation and car-storage services to over 45 blue-chip customers, operating across a variety of end markets (including aggregates, food & agriculture, chemicals and metals), primarily in eastern North Carolina.
Al Sauer, CEO, Regional Rail, commented:
“Carolina Coastal is a great fit with Regional Rail as it benefits from an attractive mix of industrial customers and further diversifies our existing freight-rail platform from an end-market and geographic perspective. We look forward to welcoming all of the Carolina Coastal employees to Regional Rail and working with them to continue the company’s successful growth.”
Doug Golden, President, Carolina Coastal, commented:
“I had been looking for the right partner to continue our legacy in North Carolina and am pleased that Carolina Coastal is becoming part of the Regional Rail family. I have known Al for many years. He and his team have been great to work with on this transaction, and I believe they will be good partners in supporting our employees, customers, and all future developments.
”Rob Collins, Managing Partner, 3i North American Infrastructure, commented:
“We’re delighted to announce a second acquisition for Regional Rail as the company continues to consolidate its position in the U.S. short-line railroad industry. Following this acquisition, Regional Rail will operate 25 line segments across five states, with almost 550 miles of track.”
3i invested in Regional Rail in July 2019 and subsequently expanded the platform in January 2020 with the acquisition of Pinsly Railroad Company’s Florida operations. Today, the company provides freight transportation, railcar storage and transloading services in New York, Pennsylvania, Delaware and Florida across six railroads with over 360 miles of track connecting into a diversified Class 1 railroad network. In 2018, the combined company moved over 29,000 carloads while serving over 140 customers across an extensive set of end-user markets including heating, fuel blending, food & beverage, agriculture, chemicals and metals. In addition to freight-rail transportation, the company also provides railroad-crossing signal design, construction, inspection and maintenance services to a diverse base of over 100 short-line and industrial customers across 20 states.
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For further information, contact:
3i Group plc
| Silvia Santoro
Investor enquiries |
Tel: +44 20 7975 3285
Email: silvia.santoro@3i.com |
| Kathryn van der Kroft
Media enquiries |
Tel: +44 20 7975 3021
Email: kathryn.vanderkroft@3i.com |
Notes to editors:
About 3i Group
3i is a leading international investment manager focused on mid-market Private Equity and Infrastructure. Its core investment markets are northern Europe and North America. For further information, please visit: www.3i.com
About Regional Rail, LLC
Regional Rail, LLC is a transportation-holding company headquartered in Kennett Square, PA. It is the parent company of East Penn Railroad LLC; Middletown & New Jersey Railroad, LLC ; Tyburn Railroad, LLC; Florida Central Railroad LLC; Florida Midland Railroad Company, Inc.; Florida Northern Railroad Company, Inc. and Diamondback Signal, LLC. For further information, please visit: www.regional-rail.com
About Carolina Coastal Railway
Carolina Coastal Railway operates a 142-mile line from Raleigh to Plymouth, NC, a 17-mile line between Belhaven and Pinetown, NC, a 20-mile line between Nashville and Rocky Mount, NC, and a 7-mile line between Blacksburg and Kings Creek, SC, which is currently out of service. Carolina Coastal also serves the Port of Morehead City, NC. CLNA serves agricultural facilities and industries throughout Eastern North Carolina, and connects at various locations with Norfolk Southern Railway and CSXT. The railroad has numerous sites available for industrial development and transloading.
Regulatory information
This transaction involved a recommendation of 3i Corporation, a US wholly owned subsidiary of 3i Group.
3i-backed Regional Rail, a leading owner and operator of short-line freight railroads and rail-related businesses in the U.S., has agreed to acquire Carolina Coastal Railway, Inc. (“Carolina Coastal”) which operates 180 miles of freight railroad in North Carolina and South Carolina, subject to authorisation from the Surface Transportation Board.
Carolina Coastal provides freight transportation and car-storage services to over 45 blue-chip customers, operating across a variety of end markets (including aggregates, food & agriculture, chemicals and metals), primarily in eastern North Carolina.
Al Sauer, CEO, Regional Rail, commented:
“Carolina Coastal is a great fit with Regional Rail as it benefits from an attractive mix of industrial customers and further diversifies our existing freight-rail platform from an end-market and geographic perspective. We look forward to welcoming all of the Carolina Coastal employees to Regional Rail and working with them to continue the company’s successful growth.”
Doug Golden, President, Carolina Coastal, commented:
“I had been looking for the right partner to continue our legacy in North Carolina and am pleased that Carolina Coastal is becoming part of the Regional Rail family. I have known Al for many years. He and his team have been great to work with on this transaction, and I believe they will be good partners in supporting our employees, customers, and all future developments.
”Rob Collins, Managing Partner, 3i North American Infrastructure, commented:
“We’re delighted to announce a second acquisition for Regional Rail as the company continues to consolidate its position in the U.S. short-line railroad industry. Following this acquisition, Regional Rail will operate 25 line segments across five states, with almost 550 miles of track.”
3i invested in Regional Rail in July 2019 and subsequently expanded the platform in January 2020 with the acquisition of Pinsly Railroad Company’s Florida operations. Today, the company provides freight transportation, railcar storage and transloading services in New York, Pennsylvania, Delaware and Florida across six railroads with over 360 miles of track connecting into a diversified Class 1 railroad network. In 2018, the combined company moved over 29,000 carloads while serving over 140 customers across an extensive set of end-user markets including heating, fuel blending, food & beverage, agriculture, chemicals and metals. In addition to freight-rail transportation, the company also provides railroad-crossing signal design, construction, inspection and maintenance services to a diverse base of over 100 short-line and industrial customers across 20 states.
Leading European leasing provider for rail transport co-founded and built by KKR’s Infrastructure platform
LONDON–(BUSINESS WIRE)–Dec. 20, 2019– KKR, a leading global investment firm, announces today the signing of a definitive agreement under which a consortium formed by AXA Investment Managers – Real Assets, acting on behalf of its clients (“AXA IM – Real Assets”) and Crédit Agricole Assurances will acquire European Locomotive Leasing (“ELL”), a leading pan-European provider of electric locomotive leasing solutions.
ELL was established in early 2014 by founder and CEO Christoph Katzensteiner together with KKR’s first Infrastructure fund, KKR Global Infrastructure Investors. The investment rationale was to meet the significant and unfulfilled market demand for modern, versatile electric locomotives, thereby supporting the broad political agenda to shift freight transportation from road to rail – a more economic and ecological transportation method – as well as to facilitate liberalization and competition in the rail market by offering leasing solutions to market players. Since its inception, the company has thrived and significantly exceeded initial expectations. While the initial business plan foresaw the purchase of a fleet of 50 locomotives, the company has after five years of operations built a fleet of over 150 locomotives that are leased on long-term contracts to over 20 customers across Continental Europe.
During that period, KKR has provided consistent support to the ELL team including through its dedicated Capital Markets team, which has led several rounds of financing for the company, each time expanding and enhancing the initial financing package put in place at inception of the company in 2014. The investment demonstrates KKR’s unique proposition in the infrastructure space, bringing experience of over four decades of building and improving businesses to the infrastructure sector, with a particular focus on businesses that have a strong ESG impact.
Vincent Policard, Member at KKR in European Infrastructure, said: “Having been there from day one, we are especially proud of what we have been able to create over the last five years together with Christoph and his incredible team. We have no doubt the future of ELL is bright and we will continue to cheer for the company from the sidelines.”
Christoph Katzensteiner, founder, CEO and minority shareholder in ELL, said: “I would like to thank KKR for having believed in us from the beginning and having enabled me and my team to turn the vision we had for ELL into a successful reality. I also want to welcome AXA IM – Real Assets and Crédit Agricole Assurances as our new partners, who will provide significant further resources to bring our company to the next level.”
The investment in ELL was made through KKR Global Infrastructure Investors, KKR’s maiden vehicle in the infrastructure space raised in 2011/2012. KKR has been active in the infrastructure space for a decade and currently has around $20bn AUM. The global infrastructure platform has completed over 30 investments in that period, half of those in Europe, across the energy & utility, transportation and telecom sectors. The team is currently investing KKR Global Infrastructure Investors III, a USD 7.4bn vehicle raised in 2018, and has been active in Europe this year with transactions including the acquisition of a majority stake in Hyperoptic, a leading UK fiber broadband provider.
Crédit Agricole CIB acted as financial advisor to KKR Infrastructure; Vinson & Elkins and K&L Gates served as legal counsels on the transaction.
For more information:
About KKR
KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. Inc. (NYSE:KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191219005881/en/
Source: KKR
Media
International
Alastair Elwen
Finsbury
Alastair.elwen@finsbury.com
+44 20 7251 3801
Germany
Raphael Eisenmann / Stephanie Lorbach
Hering Schuppener
+49 69 92 18 74-86 / Phone: +49 69 92 18 74-24
reisenmann@heringschuppener.com / slorbach@heringschuppener.com
3i-backed Regional Rail, a leading owner and operator of short-line freight railroads and rail-related businesses in the Mid-Atlantic U.S., has agreed to acquire Pinsly Railroad Company’s (“Pinsly”) Florida operations with 208 miles of track across three short-line railroads, subject to authorisation from the Surface Transportation Board.
Pinsly’s Florida operations include the Florida Central Railroad, the Florida Midland Railroad and the Florida Northern Railroad. The railroads provide freight transportation, transload and railcar-storage services to a broad customer base of over 65 blue-chip companies covering a diverse set of endmarkets, including heating, fuel blending, building products, chemicals, food and agriculture, scrap metal and plastic resins.
Given its location in and around Orlando and Tampa, Pinsly’s Florida operations provide freight traffic that is over 90% inbound serving multiple, high-growth consumption markets throughout the state. With strong population and economic trends forecast for the region, the lines are well positioned to continue the impressive traffic growth they have experienced historically.
Al Sauer, CEO, Regional Rail, commented:
“Pinsly’s Florida operations are highly complementary to Regional Rail and expand our geographic footprint. The lines have a large and diverse customer base, a strong pipeline of new freight customers and service many highly attractive industrial development sites, all of which provide an exciting growth opportunity. We also intend to retain all of the lines’ employees and look forward to supporting and working with the local management team to continue the lines’ impressive growth.”
John Levine, CEO, Pinsly, commented:
“We are delighted to have reached an agreement with Regional Rail and 3i to acquire our Florida operations. I have known the Regional Rail management team for many years and believe they will be very good stewards of the culture and team we have created.”
Rob Collins, Managing Partner, 3i North American Infrastructure, commented:
“This is an attractive and strategic acquisition for Regional Rail, given the similarities between the businesses. Combined, the two companies will operate 21 line segments across four states, with over 355 miles of track. The U.S. short-line network is attractive to 3i and the combined company will be well positioned for potential future acquisitions.”
3i invested in Regional Rail in July 2019. The company provides freight transportation, railcar storage and transloading services in New York, Pennsylvania and Delaware across three railroads with over 155 miles of track connecting into a diversified Class 1 railroad network. In 2018, the company moved over 13,000 carloads while serving over 70 customers across an extensive set of end-user markets including heating, fuel blending, food & beverage, agriculture, chemicals and metals. In addition to rail transportation services, the company also provides railroad crossing signal design, construction, inspection and maintenance services to a diverse base of over 100 short-line and industrial customers across 20 states.
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Download this press release
For further information, contact:
3i Group plc
| Silvia Santoro Investor enquiries |
Tel: +44 20 7975 3285 Email: silvia.santoro@3i.com |
| Kathryn van der Kroft Media enquiries |
Tel: +44 20 7975 3021 Email: kathryn.vanderkroft@3i.com |
About 3i Group
3i is a leading international investment manager focused on mid-market Private Equity and Infrastructure. Its core investment markets are northern Europe and North America. For further information, please visit: www.3i.com
About Regional Rail, LLC
Regional Rail, LLC is a transportation-holding company headquartered in Kennett Square, PA. It is the parent company of East Penn Railroad LLC (ESPN); Middletown & New Jersey Railroad, LLC (MNJ); Tyburn Railroad, LLC (TYBR) and Diamondback Signal, LLC. For further information, please visit: www.regional–rail.com
About Pinsly
Pinsly, through its subsidiaries, is a short-line railroad operator headquartered in Westfield, MA.
Pinsly’s Florida operations include the Florida Central Railroad Company, Inc. (FCEN); Florida Midland Railroad Company, Inc. (FMID) and Florida Northern Railroad Company, Inc. (FNOR). For further information, please visit: https://www.pinsly.com/
Regulatory information
This transaction involved a recommendation of 3i Corporation, a US wholly owned subsidiary of 3i Group.
EQT Infrastructure II (“EQT Infrastructure” or “EQT”) today announced that its portfolio company Hector Rail Group (“Hector Rail Group” or “Hector Rail”) has entered into a definitive agreement to sell GB Railfreight Limited (“GB Railfreight” or the “Company”) to Infracapital, the unlisted infrastructure equity arm of M&GPrudential (“Infracapital”).
Founded in 1999, GB Railfreight is the third largest rail freight operator in the UK and provides essential freight and non-freight haulage services to its customers. The Company’s team of 900 people operates well above 1,000 trainloads a week, moving approximately 23 percent of UK’s rail cargo. The Company has a fleet of over 180 locomotives and 1,500 wagons, transporting goods for a wide range of customers, including Network Rail, MSC, Bombardier, Drax, Tarmac and Aggregate Industries.
GB Railfreight was acquired by EQT Infrastructure II, through its existing portfolio company Hector Rail, in November 2016. The strategy during EQT’s ownership has been focused on driving sustainable growth, expanding into new segments and customers while continuing to provide best-in-class, environmentally friendly transport solutions in the UK rail market. Commercial initiatives have been supported by investments into the locomotive fleet, where locomotives and wagons have been acquired to further accelerate growth.
During EQT Infrastructure’s ownership, GB Railfreight successfully expanded its contract portfolio by adding additional contracts from both existing and new customers, and significantly increased its share of the UK rail freight market. There has been strong focus on driving expansion in the high-growth intermodal segment, with several new routes having been launched. Since 2016, GB Railfreight has expanded from being a one port only operator, to now having presence in several larger deep-sea ports in the UK, e.g. Felixstowe, Southampton and London Gateway. Over the course of EQT Infrastructure’s ownership, revenues have grown by 60%, while the fleet has increased by some 40%.
John Smith, CEO and founder of GB Railfreight, comments: “Together with EQT, the Company has been able to continue on our strong growth trajectory, adding a range of new freight services across the UK rail network and supporting the growth of the UK economy by transporting goods and materials across the country. We continue to see strong demand for our services and look forward to entering the next phase of growth together with our new owners.”
Anna Sundell, Managing Director at EQT Partners and Investment Advisor to EQT Infrastructure, adds: “GB Railfreight has continued to grow and gain market share while continuing to foster a strong safety-oriented culture and best-in-class operations, ensuring that the Company can deliver high-quality services to all its customers. Management and the entire GB Railfreight team have done a fantastic job. With the ever-increasing demand for environmentally friendly transport solutions, GB Railfreight continues to be very well positioned to continue on its strong trajectory under Infracapital’s ownership.”
Following the sale of GB Railfreight, the remaining part of Hector Rail, consisting of Hector Rail AB with operations across Scandinavia and Hector Rail GmbH with operations in Germany, stands well prepared to continue its strong trajectory as independent train haulage and traction provider in the European rail transport market. Hector Rail offers environmentally friendly transportation services of heavy industry products, raw materials and intermodal freight to clients such as industrial companies, forwarders, and other transport companies.
The transaction is expected to close mid-October 2019.
Deutsche Bank AG acted as financial advisor and Clifford Chance LLP and Simpson Thacher & Bartlett LLP as legal advisors to EQT Infrastructure.
Contact
EQT Press Office, press@eqtpartners.com, +46 8 506 55 334
About EQT
EQT is a leading investment firm with more than EUR 62 billion in raised capital and around EUR 40 billion in assets under management across 19 active funds. EQT funds have portfolio companies in Europe, Asia and the US with total sales of more than EUR 21 billion and approximately 127,000 employees. EQT works with portfolio companies to achieve sustainable growth, operational excellence and market leadership.
More info: www.eqtgroup.com
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About GB Railfreight
Founded in 1999 and headquartered in London, United Kingdom, GB Railfreight is the third largest rail freight operator in the United Kingdom, with a turnover in excess of GBP 200m. GB Railfreight is one of the fastest growing companies in the UK railway sector and transports goods and provides services for a wide range of customers.
About Infracapital
Infracapital, the unlisted infrastructure equity arm of M&GPrudential, invests in, builds and manages a diverse range of essential infrastructure to meet the changing needs of society and support long-term economic growth. We take an active role in all of our investments, whether nascent or large, to fulfil their potential and ensure they are adaptable and resilient. Our approach creates value for our investors, as we target investments with the scope for stable and sustainable growth. Our portfolio companies work closely with the communities where they are based, to the benefit of all stakeholders. Infracapital is well positioned to deliver the significant investment required to help build the future. The founder-led team of experienced specialists has worked with 50 companies around Europe and has raised and managed over £5 billion across five funds.
M&GPrudential is a leading savings and investments business which was formed in 2017 through the merger of Prudential plc’s UK and Europe savings and insurance operation and M&G, its wholly-owned international investment manager. In March 2018, Prudential plc announced its intention to demerge M&GPrudential and give it a premium listing on the London Stock Exchange. In August 2019, M&GPrudential announced its intention to list its shares under the name M&G plc when it demerges from Prudential plc in the fourth quarter of this year.
NJD has experienced strong development over the past years, with strong growth in revenues and profitability. The order backlog is currently at all-time high levels, and the company expects to reach revenues of more than NOK 650m in 2019.
As part of the value creation plan, two add-ons were completed during the ownership.
