American Railcar Industries to Merge with ITE Rail Fund

American Railcar Industries (ARI) entered into a definitive agreement to merge with a wholly-owned subsidiary of ITE Rail Fund, managed by ITE Management, at a price of $70.00 per share, which is 51% above the October 19, 2018 closing price of $46.29. The transaction is valued at approximately $1.75 billion (including ARI’s net indebtedness).

According to a related CNBC news story, Carl Icahn, who was said to own 62.2% of American Railcar shares, will earn a profit from his stake of $757.2 million.

John O’Bryan, president and CEO of ARI, commented, “ARI is a highly respected company in the railcar industry with a rich history of growth and innovation for over 20 years. The sale demonstrates the value this company, its employees and shareholders have created, and I would like to thank Icahn Enterprises for its support and guidance over the years. I would like to thank the ARI team for their dedication to our values, vision, and commitment to serving our customers. We look forward to working with the ITE team to continue to improve our business and grow in the years to come.”

Jim Unger, a partner of ITE, commented, “As one of ARI’s founders and, formerly, its president and CEO for almost 15 years, I know that ITE can work with this great organization and its people to continue to build and move America’s infrastructure. With its current railcar lease fleet of nearly 14,000 railcars and the foundation of its manufacturing and repair businesses, we are excited about partnering with the ARI team to support continued growth of the business.”

The transaction is expected to close in the fourth quarter of 2018, subject to termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. The transaction is not subject to any further due diligence or any financing conditions.

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