Wednesday, November 16, 2016

Eurotunnel Sells Third Largest UK Rail Freight Carrier to Infrastructure Equity Company

New Owners Will Run British Operation via Swedish Group
Shipping News Feature
UK – As predicted in our recent article the Eurotunnel Group has completed the sale of GB Railfreight (GBRf), the third largest rail freight operator in the UK, to equity company EQT Infrastructure II. The two companies had been in negotiations since late October when EQT had made its initial offer. GBRf will be run by the Hector Rail group, which is indirectly owned by EQT.

GBRf currently employs 650 people and runs over 1,000 trainloads a week, around 15% of the UK’s rail freight with its fleet of over 130 locomotives and 1,100 wagons. Revenues for GB Railfreight in 2016 are expected to reach approximately £125million and the amount of the transaction in enterprise value terms is said to be approximately €180 million

Hector Rail is Sweden's largest private rail freight company and was acquired by EQT in 2014. EQT has said that it plans to continue to expand in the British rail freight market through both organic and acquisitive growth opportunities. The company specialises in investing in medium-sized operating infrastructure companies that have, or have the prospect of, strong, reliable, protected cash flows and significant opportunities for value creation. These investments typically range between €50 million and €250 million. Bo Lerenius, Industrial Advisor to EQT and Chairman of the Hector Rail Group, said:

“As one of the UK’s leading rail freight operators, GB Railfreight has proven its strength in the rail industry. The focus on innovation and delivery of outstanding customer service are two key factors that make us believe that GB Railfreight is an excellent fit with Hector Rail.”