An affiliate of Perella Weinberg Partners’ Asset Based Value strategy is to acquire AIG Rail Services Inc, a provider of customised full service and net leases servicing the railroad marketplace. Financial terms of the transaction were not disclosed.
As part of the transaction, certain funds within the Asset Based Value strategy have formed a new entity to purchase and manage AIG Rail Services Inc, which will be converted into a limited liability company as part of the transactions and continue operations under the name Flagship Rail Services LLC. Eugene Henneberry, President and Chief Executive Officer of AIG Rail Services, will assume the title of President and Chief Executive Officer of Flagship Rail Services and will continue to run the business, along with AIG Rail Services’ existing management team. Subject to certain conditions, the transaction is expected to close in the second quarter of 2011.
Through this transaction, Perella Weinberg Partners’ Asset Based Value strategy will continue to expand its rail leasing and investment effort. Upon consummation of the transaction, the Asset Based Value strategy will own over 10,000 railcars that are deployed in the North American rail industry, making it the 9th largest lessor of railcars in the region.
David Schiff, Partner at Perella Weinberg Partners and Portfolio Manager of the Asset Based Value strategy, says, “Today’s announcement reflects our ongoing commitment to pursuing compelling investment opportunities that generate cash flow. We continue to see long-term value in rail, and this transaction will allow us to expand our portfolio of rail-related assets, including railcars, chassis solutions and intermodal leasing. Rail remains the most efficient mode of transportation and we expect to benefit from the positive industry dynamics going forward.”
Perella Weinberg Partners’ Asset Based Value strategy is a leading post-financial crisis provider of US specialty finance solutions. Since inception in 2008, the strategy has grown to manage in excess of USD1 billion in equity capital through a number of different investment vehicles. It can deliver significant capital, technical expertise and infrastructure in a wide range of asset classes and structures, including both real and financial assets. The strategy strives to diligence and execute transactions discretely and efficiently. Capital for the strategy is contributed by, among others, a diversified group of institutional investors who seek to invest in compelling opportunities at favourable valuations.