Canada based Brookfield Asset Management has joined hands with Singaporean sovereign wealth fund GIC and a group of small investors to buy US freight railroad owner and operator Genesee & Wyoming for about $6.4 billion, the Reuters reported.
According to the deal, the investors have agreed to pay Genesee & Wyoming shareholders $112 per share in cash, at premium of 12 percent to the company’s closing price last week.
If the company’s debt is taken into account, the deal could be worth $8.4 billion, according to Reuters.
For the deal to be closed, Genesee & Wyoming would need the backing of shareholders holding 66 percent of the outstanding common stock. The deal is expected to be closed by the year’s end or early 2020.
According to the Financial Times, Brookfield will invest about $500 million of equity; the rest will be owned by the company’s institutional partners and GIC.
According to the company’s annual report, its revenue has increased at a compound annual growth rate of 16.8 percent since it floated on the stock market back in 1996. It recorded revenue of $2.3 billion in 2018.
While Citigroup Global Markets Inc served as the financial adviser to Brookfield and GIC, Merrill Lynch and Morgan Stanley advised Genesee.
Banks including Credit Suisse, Wells Fargo, Citigroup, and RBC are involved in this deal.