July 1, 2017 / 9:31 AM / 3 years ago

Germany's VTG buys NACCO for around 780 million euros to expand fleet

FRANKFURT (Reuters) - Germany’s VTG VT9G.DE said on Saturday it had agreed to buy NACCO Group, Europe’s fourth-largest private rail car rental company, from U.S.-based financial holding company CIT Group (CIT.N), for around 780 million euros (676 million pounds) to grow its fleet.

The deal to buy Paris-based NACCO will add 14,000 freight cars to VTG’s fleet of more than 80,000 rail cars and expand its footprint in Europe, VTG said in a statement on Saturday.

In addition to the purchase price, VTG said it would reimburse financial holding company CIT Group for up to 140 million euros ($159.89 million) that NACCO plans to invest in rail cars this year.

VTG said it would finance the acquisition via a senior loan of up to 500 million euros, a privately placed hybrid bond of around 300 million euros and the assumption of around 120 million euros of debt.

It said it would refinance the hybrid bond via the capital market, possibly via a rights issue.

Depending on the investments NACCO makes this year, the purchase will add around 120 million euros to annual sales in 2018 and around 100 million euros to earnings before interest, tax, depreciation and amortisation (EBITDA), before transaction and integration costs and including synergies, VTG said.

CIT said in a separate statement that NACCO was its last remaining ongoing business outside North America.

The sale of NACCO does not affect its rail business in the United States, Canada or Mexico, CIT said.

($1 = 0.8756 euros)

Reporting by Maria Sheahan; Editing by Andrew Heavens

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