The Greenbrier Companies has completed the acquisition of a 19.5% stake in Brazilian railcar manufacturer Amsted-Maxion Hortolandia for approximately $15m.

Additionally, Greenbrier has an option to acquire an additional 40.5% ownership interest, to be exercised no later than 30 September 2017.

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The Brazilian firm will use Greenbrier’s strategic investment to pay down outstanding debt and position the company for future growth. The company is the largest wagon manufacturer in South America with a 70% share of the new railroad freight car market.

"Greenbrier has an option to acquire an additional 40.5% ownership interest, to be exercised no later than 30 September 2017."

The Brazilian industry is expected to deliver 4,000 wagons for export this year and Amsted-Maxion Hortolandia hopes this demand to continue to the end of the decade, given the ongoing investment in the national infrastructure and the need for fleet renewal, with 60% of rail freight rolling stock now more than 30-years-old.

Amsted-Maxion is a 50/50 joint venture between Amsted Rail and Iochpe-Maxion and it will continue to own the remaining 80.5% in Amsted-Maxion Hortolandia.

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In 2013, Greenbrier and Amsted-Maxion entered into a licencing agreement for the production of intermodal wagons designed by Greenbrier in Brazil.

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The Brazilian firm will provide an unparalleled value proposition to its customers using the combined strengths of its three partners, while Greenbrier will be responsible for providing its capabilities in freight car design, engineering, manufacturing, marketing and sales, and leasing to the business.

The deal will see Amsted Rail continue to provide its highly engineered components, including castings, bearings, wheels, axles and braking systems.

By increasing each of the partner’s core abilities, Greenbrier expects Amsted-Maxion Hortolandia will achieve operational synergies and revenue improvements that will make the strategic investment accretive to Greenbrier’s earnings by the second half of 2016.