GATX Corporation and Brookfield Infrastructure to Acquire Wells Fargo鈥檚 Rail Assets
- GATX and Brookfield Infrastructure form a joint venture and enter into an agreement to acquire Wells Fargo鈥檚 rail operating lease portfolio, composed of approximately 105,000 railcars
- Additionally, Brookfield Infrastructure enters into an agreement to directly acquire Wells Fargo鈥檚 rail finance lease portfolio, composed of approximately 23,000 railcars and approximately 440 locomotives
- GATX to serve as manager of the railcars in the joint venture and the finance lease railcars and locomotives directly owned by Brookfield Infrastructure
GATX鈥檚 global portfolio of assets includes tank and freight railcars, commercial aircraft spare engines, and tank containers. BIP is the flagship listed infrastructure company of Brookfield Asset Management, a leading global alternative asset manager, with over
鈥淭his is an outstanding opportunity to build on GATX鈥檚 leading North American platform,鈥� said Robert C.
Mr.
The transaction is subject to customary closing conditions, including required regulatory approvals and clearances, and it is expected to close in the first quarter of 2026 or sooner.
Advisors
BofA Securities acted as the sole financial advisor to GATX and Brookfield Infrastructure.
Mayer Brown is serving as legal counsel to GATX. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to Brookfield Infrastructure.
Transaction Details
The following information relates to the newly formed joint venture between GATX and Brookfield Infrastructure and the agreement to acquire the rail operating lease portfolio, composed of approximately 105,000 railcars:
Joint Venture Structure
-
Initial equity ownership in the joint venture will be shared between GATX (
30% ) and Brookfield Infrastructure (70% ). - GATX will have commercial and operational control of the joint venture assets and will manage all assets on behalf of the partners.
-
GATX will hold a series of annual call options that, if exercised, will enable GATX to acquire up to
100% of Brookfield Infrastructure鈥檚 equity interest over time. If each annual call option is exercised, GATX would acquire Brookfield Infrastructure鈥檚 equity interest in 10 years or less. -
GATX鈥檚 initial equity contribution will be approximately
and will be funded through general operating cash flow and financing activity. Future call options, if exercised, also will be funded through general operating cash flow and financing activity and will fit manageably within GATX鈥檚 ordinary capital investment plan.$400 million - It is expected that the joint venture will be a static pool of assets. GATX鈥檚 current and future investment and growth initiatives across its businesses are expected to be unaffected by this acquisition.
Joint Venture Financing
-
In addition to the partner equity contributions, Wells Fargo Securities, LLC, BofA Securities, MUFG Bank Ltd., and Sumitomo Mitsui Banking Corporation (SMBC) are providing the joint venture with a fully underwritten
5-year unsecured term loan and a$3.2 billion unsecured revolving credit facility.$250 million
Financial Statement Impact
- Given GATX鈥檚 commercial and operational control of the joint venture assets, it is expected that the joint venture will be consolidated on GATX鈥檚 financial statements.
- It is expected that Brookfield Infrastructure鈥檚 initial joint venture equity contribution, a Non-Controlling Interest (鈥淣CI鈥�), will be presented on GATX鈥檚 balance sheet as common equity.
- GATX鈥檚 post-acquisition credit and return metrics are expected to be generally in line with current metrics.
The Wells Fargo Rail Assets Acquired
-
The 105,000 railcar operating lease portfolio consists primarily of freight cars (
95% ), spread across a diverse mix of specific car types. -
Current fleet utilization is approximately
97% .
TELECONFERENCE INFORMATION
GATX Corporation will hold an investor call on the morning of May 30, 2025 to discuss the transaction. Call details are as follows:
Date: |
May 30, 2025 |
Time: |
9:00 a.m. (Eastern Time) |
Domestic Dial-In: |
1 (800) 715-9871 |
International Dial-In: |
1 (646) 307-1963 |
Live Webcast: |
|
Replay: 1-800-770-2030 (or 1-609-800-9909 International) / Access Code: 8822283
Call-in details, a copy of this press release, related presentation materials and real-time audio access are available at . Please access the call 15 minutes prior to the start time. A replay will be available on the same site starting at 2 p.m. (Eastern Time), May 30, 2025.
FORWARD-LOOKING STATEMENTS
Statements contained in this press release that are not based on historical facts are 鈥渇orward-looking statements鈥� within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks and uncertainties that are difficult to predict and could cause actual results, performance, or achievements to differ materially from those expressed or implied by such statements. Forward-looking statements include, but are not limited to, statements regarding our future expectations, beliefs, plans, strategies, objectives, events, conditions, financial performance, prospects, or future events. In some cases, forward-looking statements can be identified by words such as 鈥渕ay,鈥� 鈥渃ould,鈥� 鈥渆xpect,鈥� 鈥渋ntend,鈥� 鈥減lan,鈥� 鈥渟eek,鈥� 鈥渁nticipate,鈥� 鈥渂elieve,鈥� 鈥渆stimate,鈥� 鈥減redict,鈥� 鈥減otential,鈥� 鈥渙utlook,鈥� 鈥渃ontinue,鈥� 鈥渓ikely,鈥� 鈥渨ill,鈥� 鈥渨ould,鈥� and similar expressions.
Forward-looking statements are based on estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Actual results may differ materially from those anticipated in these statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
A variety of factors could cause actual results to differ materially from current expectations expressed in forward-looking statements, including, but not limited to, those discussed under 鈥淩isk Factors鈥� and elsewhere in our filings with the
These and other risks and uncertainties could cause actual results to differ materially from those projected or implied in forward-looking statements. For a more complete discussion of these and other risks, please refer to our filings with the
COMPANY DESCRIPTION
At GATX Corporation (NYSE: GATX), we empower our customers to propel the world forward. GATX leases transportation assets including railcars, aircraft spare engines and tank containers to customers worldwide. Our mission is to provide innovative, unparalleled service that enables our customers to transport what matters safely and sustainably while championing the well-being of our employees and communities. Headquartered in
AVAILABILITY OF INFORMATION ON GATX'S WEBSITE
Investors and others should note that GATX routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the GATX Investor Relations website. While not all of the information that the Company posts to the GATX Investor Relations website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media and others interested in GATX to review the information that it shares on under the 鈥淚nvestors鈥� tab.
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FOR FURTHER INFORMATION CONTACT:
GATX Corporation
Shari Hellerman
Senior Director
Investor Relations and Corporate Communications
312-621-4285
[email protected]
Source: GATX Corporation