~ Creates Europe's largest end-to-end
freight railcar business ~
~ Advances Greenbrier's international strategy
~
~ Expected to be accretive to Greenbrier's earnings per
share annually beginning in fiscal 2018 ~
LAKE OSWEGO, Oregon,
June 1, 2017 /PRNewswire/ -- The
Greenbrier Companies, Inc. (NYSE:GBX) and Astra Holding GmbH
announced today that they have completed their previously announced
plans to create Greenbrier-Astra Rail. The combination creates
Europe's largest end-to-end
freight railcar manufacturing, engineering and repair business to
reach markets throughout Europe,
Eurasia, and Gulf Cooperation Council (GCC) countries like
Saudi Arabia. It is expected that
Greenbrier-Astra Rail will be accretive to Greenbrier's annual
earnings per share by $0.15-$0.35,
beginning in fiscal 2018.
As previously announced, Greenbrier controls Greenbrier-Astra
Rail with an equity interest equal to approximately 75%.
Thomas Manns, most recently chairman
of Astra Rail, owns the remainder of
the new company. In addition to his ownership stake, Manns
becomes Chairman of the Supervisory Board of Greenbrier-Astra Rail
and leads its commercial operations, working closely with its
Management Board and Jim Cowan,
President of Greenbrier International. Also serving on the
Supervisory Board is Bill Furman,
Chairman and CEO of Greenbrier; Alejandro Centurion, President of
Greenbrier Global Manufacturing Operations; Klaus Krauth, Managing Director of Astra Holding
GmbH and Cowan.
Greenbrier-Astra Rail is led by a
team with decades of experience in railcar markets throughout
Eastern and Western Europe, as
well as experience in North
America and emerging markets around the world. Daily
operations are led by a Management Board including CEO and
President Bernd Böse, most recently
CEO of Astra Rail, and CFO
Bogdan Lesnianski, previously head
of Greenbrier's Wagony Swidnica operations.
Industry estimates indicate a high replacement demand for
freight railcars in the Western European rail market, where the
typical freight railcar has been in service for at least 25 years.
Demand in mature markets like Western
Europe coupled with opportunities in nearby emerging markets
positions Greenbrier-Astra Rail for success.
"The creation of Greenbrier-Astra Rail extends Greenbrier's
commitment to global diversification while providing scale and
greater value to our customers in Europe," said Furman. "We are excited to unify
the creative and capable management teams from both companies to
deliver world-class innovation to our freight railcar customers in
Europe and beyond. Together with
our investments in Saudi Arabia,
Brazil and Mexico, Greenbrier has substantially grown our
international footprint over the last several years to create a
truly global network. We look forward to an expanded presence
in Europe, while we also address
developing markets in the GCC, Africa and Eurasia."
"This transaction is transformational. Our combined
operation is better positioned to pursue the growth opportunities
offered by the freight car markets in Europe and globally," said Manns.
"Greenbrier-Astra Rail will capitalize on the substantial market
opportunity in Europe, leveraging
our resources to provide the best end-to-end solutions for our
customers. Beyond Europe, we will aggressively pursue
opportunities in emerging freight railcar markets which we can
uniquely access from our Europe-based operations."
Greenbrier-Astra Rail includes
all European operations of Greenbrier and Astra Rail including 6 railcar manufacturing
sites and railcar repair facilities in addition to sales,
administration and engineering offices. The new company
proudly employs 4,000 people across Eastern and Western
Europe.
The new company will deploy the global engineering, design and
manufacturing expertise of the Greenbrier Manufacturing
Organization (GMO), with flagship facilities in Portland, Oregon and Colleyville, Texas.
GMO's extensive capabilities allow Greenbrier-Astra Rail to produce
freight cars for any gauge or local standard in the world.
For example, contracts with GCC-based customers for US-style
freight railcars will continue to be manufactured in Europe under the direction of Greenbrier's
senior US manufacturing team.
About Greenbrier
Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading
international supplier of equipment and services to freight rail
transportation markets. Greenbrier designs, builds and markets
freight railcars in North America,
Latin America and Europe. We
also build and market marine barges in North America. We
manufacture freight railcars in Brazil through a strategic partnership in
which we hold a majority interest and produce rail castings through
a separate Brazilian partnership. Greenbrier also has a majority
stake in Greenbrier-Astra Rail, an end-to-end, Europe-based freight railcar manufacturing,
engineering and repair business. Through our European manufacturing
operations, we deliver U.S.-designed tank cars to Saudi Arabia. We are a leading provider of
wheel services, parts, leasing and other services to the railroad
and related transportation industries in North America and a supplier of freight
railcar repair, refurbishment and retrofitting services in
North America through a joint
venture partnership with Watco Companies, LLC. Through other joint
ventures, we produce rail castings, tank heads and other railcar
components. Greenbrier owns a lease fleet of over 8,000 railcars
and performs management services for over 266,000 railcars.
About Astra Rail
In 1998, Thomas Manns, at the
young age of 21, stepped in to run his family's business of
commercial vehicle rentals upon the death of his father. He built
that company into a major force in Western and Eastern European
markets. After selling the business in 2008, Mr. Manns
entered the real estate business in Eastern Europe and Germany. In 2012, he purchased
Astra Rail properties and together
with Mr. Bernd Böse, who runs the
operative business of Astra Rail,
built the multi-plant business into a highly profitable operation
with three manufacturing, engineering and repair factories in Arad,
Severin and Caracal, Romania over
the course of a few short years.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: This press release may contain
forward-looking statements, including any statements that are not
purely statements of historical fact. 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 that
are not indicative of Greenbrier's financial results; uncertainty
or changes in the credit markets and financial services industry;
high levels of indebtedness and compliance with the terms of
Greenbrier's 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; policies and priorities of the
federal government regarding international trade and
infrastructure; 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 Greenbrier's insurance coverage; train derailments or
other accidents or claims that could subject Greenbrier to legal
claims; actions or inactions by various regulatory agencies
including potential environmental remediation obligations or
changing tank car or other railcar 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 Greenbrier's Annual
Report on Form 10-K for the fiscal year ended August 31, 2016 and Greenbrier's Quarterly Report
on Form 10-Q for the fiscal quarter ended February 28, 2017, and 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.
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