An unnamed subsidiary of ITE Rail Fund has signed a definitive agreement to acquire American Railcar Industries (ARI) for around $1.75bn, including debt.
ARI is a majority-owned subsidiary of Icahn Enterprises’ (IEP) and is involved in the design and manufacturing of hopper and tank railcars. The company also provides railcar repair services from mini-shops and mobile units.
The ITE Rail Fund subsidiary will merge with ARI at a price of $70 per share.
Completion of the deal is scheduled by the last quarter of this year but is subject to termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Icahn Enterprises chairman Carl Icahn said: “ARI is one of America’s great companies.
“As one of the leading railcar manufacturers, it has played an important role in infrastructure development and economic growth throughout North America.”
In 2010 IEP first bought its majority share in ARI. The latest deal has enabled IEP to generate a total return of 423%, for a profit of around $757.2m.
IEP completed the sale of its indirect wholly-owned subsidiary Federal-Mogulto Tenneco in a deal valued at $5.4bn.