Greenbrier advances railcar leasing strategy with portfolio acquisition

Rhea-AI Summary

The Greenbrier Companies (NYSE: GBX) announced the acquisition of over 3,600 railcars, aiming to enhance its leasing operations via its GBX Leasing subsidiary. This acquisition is part of an initial strategy to invest $200 million in new railcars within its first year, and to date, GBXL has nearly 4,000 units valued at $350 million. The acquisition is designed to provide diversified leasing options to high credit lessees across various industries, potentially increasing revenues and shareholder value.

Positive

• Acquisition of 3,600 railcars enhances leasing portfolio.
• GBXL's fleet now totals nearly 4,000 units, exceeding initial investment targets by 75%.
• The acquisition allows Greenbrier to serve new market participants and existing customers effectively.

Negative

• None.

LAKE OSWEGO, Oregon, Oct. 13, 2021 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) ("Greenbrier"), a leading international supplier of equipment and services to global freight transportation markets, today 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% 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 September 30, 2021, 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%. 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 stated, "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."

About Greenbrier

Greenbrier, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Through its wholly owned subsidiaries and joint ventures, Greenbrier designs, builds and markets freight railcars and marine barges in North America, Europe and Brazil. We are a leading provider of freight railcar wheel services, parts, repair, refurbishment and retrofitting services in North America through our wheels, repair & parts business unit.  Greenbrier manages 445,000 railcars and offers railcar management, regulatory compliance services and leasing services to railroads and other railcars owners in North America. GBX Leasing (GBXL) is a special purpose subsidiary that owns and manages a portfolio of leased railcars that originate primarily from Greenbrier's manufacturing operations. Together, GBXL and Greenbrier own a lease fleet of nearly 12,500 railcars.  Learn more about Greenbrier at www.gbrx.com.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:  This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Greenbrier uses words such as "advances", "deliver" , "generate", "growing",  and "scale", and similar expressions         to identify forward-looking statements. These forward-looking statements relate to a variety of matters, including, without limitation, statements that relate to Greenbrier's leasing strategy, returns, tax treatment, cash flows, and value being indicative of Greenbrier's level of future returns. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors that might cause such a difference are discussed in more detail under the headings "Risk Factors" and "Forward Looking Statements" in Greenbrier's Annual Report on Form 10-K for the fiscal year ended August 31, 2020 and Greenbrier's Quarterly Reports, and in Greenbrier's other reports on file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. Except as otherwise required by law, Greenbrier does not assume any obligation to update any forward-looking statements.

 

View original content:https://www.prnewswire.com/news-releases/greenbrier-advances-railcar-leasing-strategy-with-portfolio-acquisition-301398902.html

SOURCE The Greenbrier Companies, Inc. (GBX)

FAQ

What acquisition did Greenbrier announce on October 13, 2021?

Greenbrier announced the acquisition of over 3,600 railcars as part of its leasing strategy.

How much has Greenbrier invested in its leasing subsidiary GBXL?

Greenbrier aims to invest a minimum of $200 million in railcars in the first year of GBXL's operations.

What is the current value of GBXL's fleet after the recent acquisition?

As of September 30, 2021, GBXL's fleet has a fair market value of $350 million.

How does the acquisition impact Greenbrier's shareholder value?

The acquisition is expected to generate attractive returns and deliver further value to Greenbrier's shareholders.

What industries do the railcars acquired by Greenbrier serve?

The railcars serve a variety of industries, including agriculture, energy, petrochemical, and consumer goods.