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Greenbrier Advances Railcar Leasing Strategy with Acquisition

October 13, 2021, 07:12 AM
Filed Under: Mergers & Acquisitions

The Greenbrier Companies, Inc. announced the acquisition of more than 3,600 railcars, a portion of which will be held in GBX Leasing (GBXL), a recently formed special purpose subsidiary which is approximately 95 percent owned by Greenbrier.

GBXL was formed to acquire a minimum of $200 million of newly built and leased railcars in its first year of operations. GBXL serves high credit quality railcar lessees which require leases with mid-to-longer term maturities. As of Sept. 30, GBXL’s fleet totals nearly 4,000 units with a fair market value of $350 million, exceeding Greenbrier’s initial investment target for the venture by 75 percent. The fleet was assembled through a combination of lease originations on Greenbrier built railcars and the portfolio acquisition announced today. This two-pronged acquisition strategy allows GBXL to rapidly scale a diversified portfolio of leased railcars. Railcars in the GBXL fleet transport a wide variety of commodities and serve a broad range of industries, including agriculture, energy, petrochemical and consumer goods.

Greenbrier CEO and Chairman William A. Furman said, “By providing tax-advantaged cash flows, lease fleet investments reduce Greenbrier’s exposure to the inherent cyclicality of freight transportation equipment manufacturing. The recent railcar acquisition advances Greenbrier’s strategy to increase the scale of our lease fleet assets. The mix of railcar types included in the acquisition is an excellent fit for our growing GBXL portfolio. The fleet allows us to better serve our existing customers and engage market participants previously unaddressed by Greenbrier. Additionally, the transaction will generate attractive returns, delivering further value to our shareholders.”

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