W.L. Ross Backs Greenbrier Companies
June 15, 2009
W.L. Ross & Co. will acquire a minority stake in The Greenbrier Companies (NYSE, GBX) and loan the company $75 million as part of a recently announced deal. As part of the transaction the railroad freight car manufacturer and servicer will also issue W.L. Ross warrants to buy 3.4 million shares, which equates to a 17% stake, with a $6 strike price. WL Ross also said that it intends to buy at least $1.5 million of the company's stock on the open market.
The rail industry has received surprisingly little attention from private equity investors. There have only been 17 investments in the railroad industry by private equity investors over the last decade, according to the PitchBook Platform. The biggest investor in the industry has been Fortress Investment Group, which invested $4.1 billion between two companies, Florida East Coast Industries and RailAmerica. Another active investor in the industry has been The Riverside Company, which acquired Nordco in 2003 from One Equity Partners and added on three companies before selling it to OMERS Private Equity last month for an IRR of 31%.