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Rail News Home M&A

7/19/2007



Rail News: M&A

Private equity firm focuses on CPR buyout; Interpool stockholders OK sale to Fortress


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Earlier this year, private equity firm Fortress Investment Group L.L.C. acquired a short-line holding company and landed a deal to take ownership of a regional. Now, a different private equity firm is trying to reel in a Class I.

A consortium led by Brookfield Asset Management Inc., and including Goldman Sachs & Co. and Caisse de dépôt et placement du Québec, plans to prepare a bid to complete a leveraged buyout of Canadian Pacific Railway. The deal could exceed $14 billion.

However, Brookfield Asset Management had already approached CPR’s board earlier this year seeking exclusive negotiations and due diligence for a buyout and was turned down, the Class I said in a statement released yesterday, adding that there aren’t any current deals on the table.

“From time to time, CPR receives inquiries with respect to possible acquisitions or business combinations, and has received such inquiries more frequently recently as it continues its strong financial performance,” the railroad said. “While CPR continues to receive such inquiries, it is not at this time in negotiations with any party with respect to a business combination.”

Meanwhile, Fortress, which acquired RailAmerica Inc. in February and negotiated a deal to acquire Florida East Coast Industries in May, announced Interpool Inc.’s stockholders approved a sale to Fortress affiliate Chariot Acquisition Holding L.L.C.

Under terms of the deal reached in April, Chariot will pay Interpool stockholders $27.10 in cash for each share of common stock. Interpool supplies a pool of intermodal and cargo containers to the transportation industry.