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December 21, 2015

The biggest rail company takeovers in 2015

Some of the biggest UK rail companies such as Eversholt and Eurostar were targeted for acquisition by foreign companies in 2015. Railway-technology.com lists five of the biggest rail company takeovers in 2015 based on deal value.

CKI / Eversholt Rail

CKI / Eversholt Rail – £2.5bn ($3.79bn)

CK Investments S.A R.L., a joint venture between Cheung Kong Infrastructure Holdings Limited and Cheung Kong (Holdings) Limited, (together, "CKI") acquired Eversholt Rail Group (Eversholt), one of the three leading rolling stock providers in the UK, for £2.5bn ($3.79bn), in April 2015.

The transaction was announced in January 2015. CKI’s transportation product portfolio includes Park’N Fly, the largest off-airport car park supplier in Canada, and approximately 280km of toll roads and bridges in China. Eversholt offers rolling stock asset management services, including passenger trains and freight locomotives, to passenger as well as freight train operators.

The acquisition ponders CKI’s strategy of adopting new growth prospects through diversification and globalisation. The deal is intended to strengthen the Group’s portfolio and expand its revenue base worldwide.

CDPQ and Hermes Infrastructure / Eurostar – £757.1m (Approximately $1.16bn)

Patina Rail LLP, a consortium of Caisse de dépôt et placement du Québec ("CDPQ") and Hermes Infrastructure, acquired 40% stake in Eurostar International Limited (Eurostar) from the UK Government for a consideration of £757.1m (Approximately $1.16bn), in May 2015.

The agreement for the transaction was signed in March 2015. CDPQ and Hermes Infrastructure now own 30% and 10% of Eurostar, respectively. Other stakeholders include Société Nationale des Chemins de Fer Français ("SNCF") (55%) and Société Nationale des hemins de Fer Belges ("SNCB") (5%).

Eurostar offers high speed passenger train services, primarily between London – Paris and London – Brussels, running through the Channel Tunnel. Eurostar carried more than 150 million passengers since its inception in 1994, with over 10.4 million in 2014 alone.

Hitachi / Ansaldo STS

Hitachi / ANSALDO STS – €761m (Approximately $840m)

Hitachi acquired Finmeccanica’s entire a stake in Ansaldo STS S.p.A., representing approximately 40% of its issued share capital, for €761m (approximately $840m) in November 2015.

The binding agreements for the acquisition were signed between both parties in February 2015. Upon the distribution of dividends of Eur 0.15 per share, announced in March 2015, the effective purchase price amounted to €9.50 per share.

The acquisition allows Hitachi rail business to transform into a global leader in total rail solutions by extending its footprint in Italy and global markets. The deal will also allow Hitachi to fortify its status in signalling and traffic management systems.

Genesee & Wyoming / Freightliner Group Limited – £492m (Approximately $733m)

Genesee & Wyoming Inc. (G&W) acquired approximately 94% of Freightliner Group Limited (Freightliner) from Arcapita for approximately £492m (approximately $733m), also taking on approximately £19m (approximately $29m) of net debt and capitalized leases. G&W is expected to acquire the remaining stake in Freightliner by mid-2020.

G&W entered into an agreement to acquire Freightliner in February 2015. The change of ownership causes no effect on regular operations of the Group and its subsidiaries, and all existing arrangements for Freightliner’s controlling businesses will remain unchanged.

The US-based G&W owns or leases 120 freight railroads in 11 operating regions across the world, whereas Freightliner is a leading rail freight solutions provider with operational footprint in the UK, Continental Europe, Australia and the Middle East. The acquisition enables G&W to expand its world class intermodal and heavy haul rail operations in the UK, continental Europe and Australia.

KKR / Trainline

KKR / Trainline – Approximately £450m ($681m)

KKR, a leading global investment firm, acquired Trainline, the UK’s leading online vendor of rail tickets, for an anticipated consideration of £450m (approximately $681m), in the first quarter of 2015.

KKR announced the acquisition in January 2015 and received a £205m senior term loan under European Loan Programme (ELP) to fund the acquisition conducted in March 2015. It has invested approximately $13bn of equity in more than 49 companies operating in software, internet, media and IT-infrastructure industries since 2000.

The acquisition will complement digital-driven investment programmes of KKR and will enable the company to expand its operations worldwide. The investment will support Trainline to transform into a leading international ecommerce platform.

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