American Railcar Industries, Inc. (ARI) entered into a definitive agreement to merge with a wholly-owned subsidiary of ITE Rail Fund L.P., managed by ITE Management L.P., at a price of USD 70 per share, which is 51% above the October 19, 2018 closing price of USD 46.29. The transaction is valued at approximately USD 1.75 billion, including ARI’s debt.
Icahn Enterprises owned majority shares in American Railcar Industries. Icahn Enterprises first acquired its majority interest in ARI in 2010. With this transaction, IEP’s investment in ARI has generated a total return of 423%, for a profit of approximately USD 757.2 million.
“ARI is one of America’s great companies. As one of the leading railcar manufacturers, it has played an important role in infrastructure development and economic growth throughout North America. I thank the management team and all our dedicated employees. You built a tremendous company and without you, we would not have achieved this great result,” Carl Icahn, Chairman of Icahn Enterprises, said.
The transaction is expected to close in the fourth quarter of 2018, subject to termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction is not subject to any further due diligence or any financing conditions.
American Railcar Industries is a fully integrated supplier to the North American freight car market and is also providing railcar leasing and railcar services.
ITE Management, an affiliate of ITE Rail Fund L.P., is an investment firm targeting industrial and transportation assets and companies, and related industries and services with a critical focus on investments that generate current cash.
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