LAKE OSWEGO, Ore., May 24, 2016 /PRNewswire/
-- The Greenbrier Companies, Inc. (NYSE: GBX) today
announced that it has entered into an agreement to acquire a 19.5%
ownership stake in Amsted-Maxion Cruzeiro for $10 million. Based in Cruzeiro, Brazil, Amsted-Maxion Cruzeiro is a
manufacturer of castings and components for railcars and other
heavy equipment owned 50/50 by Amsted Rail Company, Inc. ("Amsted")
and Iochpe-Maxion S.A. ("Iochpe") prior to Greenbrier's
investment. Amsted-Maxion Cruzeiro will use Greenbrier's
strategic investment to pay down outstanding debt and position the
company for future growth. The strategic investment is subject to
customary closing conditions, including antitrust review, and is
expected to close in the fourth quarter of Greenbrier's fiscal
2016.
Amsted-Maxion Cruzeiro is also the co-owner with Greenbrier of
Amsted-Maxion Equipamentos E Serviços Ferroviários S.A.
("Greenbrier-Maxion"), the Brazilian railcar manufacturer based in
Hortolândia. Greenbrier currently owns 19.5% of Greenbrier-Maxion
while Amsted-Maxion Cruzeiro holds the remaining 80.5% equity
interest. Upon exercising purchase options it holds,
Greenbrier can potentially own up to a 60% direct equity interest
in Greenbrier-Maxion. When Greenbrier completes the current
investment in Amsted-Maxion Cruzeiro it will, directly and
indirectly, own 35% of the outstanding equity of
Greenbrier-Maxion.
Amsted-Maxion Cruzeiro serves a broad range of transportation
equipment markets throughout Latin
America, and provides railcar castings and components to
Greenbrier-Maxion. Amsted-Maxion Cruzeiro also supplies
components for heavy equipment used in agriculture, mining and
other industrial applications. Net sales of Amsted-Maxion Cruzeiro
totaled approximately $100 million in
calendar 2015. Greenbrier-Maxion achieved over $200 million in net sales for the same
period. As part of this investment, Greenbrier has secured an
option, subject to certain conditions, to acquire an additional 10%
interest in Amsted-Maxion Cruzeiro. Greenbrier's option expires on
October 20, 2017. Amsted, Iochpe and
Greenbrier will also enter a shareholders' agreement that provides
Greenbrier customary minority governance protections in
Amsted-Maxion Cruzeiro.
In 2015, as part of its initial investment in Greenbrier-Maxion,
Greenbrier secured an option to acquire an additional 40.5% direct
ownership interest in Greenbrier-Maxion. The option is
exercisable until December 30, 2017,
but has been modified as part of the current transaction to provide
Greenbrier greater flexibility. The option now allows Greenbrier to
purchase an additional direct ownership interest in
Greenbrier-Maxion at any point in a range between 30.6% and 40.5%,
with the option exercise price adjusted in proportion to the
ownership interest obtained.
"Our first year of operations with Amsted and Iochpe at
Greenbrier-Maxion has been an unqualified success. A sign of our
progress came last month when Revista Ferroviaria, the leading rail
publication in Brazil, recognized
Greenbrier-Maxion as Best Freight Car Manufacturer and Best
Manufacturer of Undercarriage Components over several larger,
well-established multinational competitors," said William A. Furman, Chairman and CEO.
Furman added, "Global markets are increasing in strategic
importance for Greenbrier. Over the years, Greenbrier has
successfully participated in several joint ventures,
internationally and domestically. I am pleased to extend our
partnership in Brazil with Amsted
and Iochpe beyond railcar manufacturing into castings and
components for railcars and other heavy equipment."
About Greenbrier
Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of
transportation equipment and services to the railroad industry.
Greenbrier builds new railroad freight cars in manufacturing
facilities in the U.S., Mexico and
Poland and marine barges at our
U.S. manufacturing facility. Greenbrier sells reconditioned wheel
sets and provides wheel services at locations throughout the U.S.
We recondition, manufacture and sell railcar parts at various U.S.
sites. Through GBW Railcar Services, LLC, a 50/50 joint venture
with Watco Companies, LLC, freight cars are repaired and
refurbished at over 30 locations across North America, including more than 10 tank car
repair and maintenance facilities certified by the Association of
American Railroads. Greenbrier owns a lease fleet of over 10,000
railcars and performs management services for over 250,000
railcars.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: This press release may contain
forward-looking statements, including statements regarding expected
new railcar production volumes and schedules, expected customer
demand for the Company's products and services, plans to adjust
manufacturing capacity, restructuring plans, new railcar delivery
volumes and schedules, changes in demand for the Company's railcar
services and parts business, and the Company's future financial
performance. Greenbrier uses words such as "anticipates,"
"believes," "forecast," "potential," "goal," "contemplates,"
"expects," "intends," "plans," "projects," "hopes," "seeks,"
"estimates," "strategy," "could," "would," "should,"
"likely," "will," "may," "can," "designed to," "future,"
"foreseeable future" and similar expressions to identify
forward-looking statements. 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 include, but
are not limited to, reported backlog and awards are not indicative
of our financial results; uncertainty or changes in the credit
markets and financial services industry; high levels of
indebtedness and compliance with the terms of our indebtedness;
write-downs of goodwill, intangibles and other assets in future
periods; sufficient availability of borrowing capacity;
fluctuations in demand for newly manufactured railcars or failure
to obtain orders as anticipated in developing forecasts; loss of
one or more significant customers; customer payment defaults or
related issues; sovereign risk to contracts, exchange rates or
property rights; actual future costs and the availability of
materials and a trained workforce; failure to design or manufacture
new products or technologies or to achieve certification or market
acceptance of new products or technologies; steel or specialty
component price fluctuations and availability and scrap surcharges;
changes in product mix and the mix between segments; labor
disputes, energy shortages or operating difficulties that might
disrupt manufacturing operations or the flow of cargo; production
difficulties and product delivery delays as a result of, among
other matters, costs or inefficiencies associated with expansion,
start-up or changing of production lines or changes in production
rates, changing technologies, transfer of production between
facilities or non-performance of alliance partners, subcontractors
or suppliers; ability to obtain suitable contracts for the sale of
leased equipment and risks related to car hire and residual values;
integration of current or future acquisitions and establishment of
joint ventures; succession planning; discovery of defects in
railcars or services resulting in increased warranty costs or
litigation; physical damage or product or service liability claims
that exceed our insurance coverage; train derailments or other
accidents or claims that could subject us to legal claims; actions
or inactions by various regulatory agencies including potential
environmental remediation obligations or changing tank car or other
rail car or railroad regulation; and issues arising from
investigations of whistleblower complaints; all as may be discussed
in more detail under the headings "Risk Factors" and "Forward
Looking Statements" in our Annual Report on Form 10-K for the
fiscal year ended August 31, 2015,
and our 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, we do not assume any obligation to update any
forward-looking statements.
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SOURCE The Greenbrier Companies, Inc. (GBX)