Germany’s Federal Cartel Office approved VTG’s acquisition of the Nacco Group and a corresponding decision of the Austrian antitrust court is soon expected. The conditional approval granted by Germany’s Federal Cartel Office aligns with VTG’s offer to sell about 30 percent of the Nacco business it will acquire to third parties in advance of the deal. The Executive Board of VTG AG expects its acquisition of the remaining roughly 70 percent (10,000 freight cars) to be completed in the second half of 2018.
In July 2017, VTG reached a definitive agreement to acquire CIT Rail Holdings (Europe) and the associated NACCO Group, which both own a fleet of around 14,000 freight cars. NACCO is the fourth largest private rental company of rail freight cars in Europe.
Last year, VTG said that it expects a purchase price of approximately EUR 780 million plus all investments made by the NACCO Group in rail freight cars between January 1st 2017 and closing date which could sum up to EUR 140 million. The company will finance the transaction via a senior loan of up to EUR 500 million, a privately placed hybrid bond of approximately EUR 300 million and the assumption of existing net debt of approximately EUR 120 million.
Depending on the investments in railcars made by NACCO in 2017, VTG expects a sales contribution of EUR 120 million from the acquisition this year and an EBITDA contribution of EUR 100 million before transaction and integration costs, including significant synergies.
With this transaction, VTG is further expanding its market position as one of the largest private railcar leasing companies in Europe with a fleet of then more than 94,000 railcars.
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