The Andersons, Inc. has sold its railcar leasing business to American Industrial Transport, Inc. (AITX) for approximately $550 million in cash.
The Andersons also intends to market its remaining railcar repair business, including 29 facilities throughout the United States.
"This railcar leasing business has been a successful and consistent cash flow generator for The Andersons. The strategic decision to sell the leasing business allows us to focus on and invest in our agricultural segments to leverage our core strengths. It also will improve our balance sheet thereby enabling us to redeploy capital in a manner that will enhance shareholder returns," said Pat Bowe, President and CEO of The Andersons. "While we intend to divest our Rail segment in its entirety, we will continue normal operations of our repair and service business as we conduct a sale process."
AITX provides solutions to the freight shipping industry across railcar leasing, repair, and data. The company is an affiliate of ITE Management L.P., an asset manager targeting transportation and industrial assets and companies and related industries and services.
"We are incredibly pleased to expand the breadth and depth of our railcar leasing platform and the services AITX can provide. AITX expects to hire a majority of The Andersons employees in the railcar leasing business, and we are pleased to welcome aboard our new team members," said Jason Koenig, Managing Partner at ITE and member of the AITX Board of Directors. "With our more diversified fleet offering and best-in-class repair network, AITX customers now have greater flexibility to meet their rail shipping, servicing, and data needs."
"The employees involved are among the most skilled and experienced in the railcar leasing industry, and they have been critical to our success," commented Joe McNeely, President, The Andersons Nutrient and Industrial business. "We deeply value their contributions and thank them for their commitment to The Andersons. We're determined to make their transitions as smooth as possible."
The company expects to use the proceeds initially to pay down debt, while maintaining a disciplined approach to future growth investments and returning cash to shareholders.
