Brookfield Infrastructure and GIC to privatize Genesee & Wyoming for US $8.4B

Brookfield Infrastructure (NYSE: BIP; TSX: BIP.UN) together with GIC and Brookfield Infrastructure’s institutional partners have agreed to acquire Genesee & Wyoming Inc. (G&W) (NYSE: GWR) at US $112 per share in a transaction valued at approximately US $8.4 billion including debt.

Brookfield Infrastructure’s investment will be approximately US $500 million of equity. The remainder of the business will be owned by Brookfield Infrastructure’s institutional partners and GIC.

The transaction will result in G&W becoming a privately held company. The transaction is expected to close by year-end or early 2020.

G&W owns or leases 120 freight railroads worldwide that are organized in eight operating regions with approximately 8,000 employees and 3,000 customers. G&W’s subsidiaries and joint ventures also provide rail service at more than 40 major ports, rail-ferry service between the United States Southeast and Mexico, transload services, contract coal loading, and industrial railcar switching and repair.

The Genesee and Wyoming Railroad Company, G&W’s predecessor, was founded in 1899 by E.L. Fuller and his partners. From its founding through 1977, G&W was dependent on a single commodity, salt, produced by a single customer, Akzo Nobel Salt, Inc. In 1977, Mortimer B. Fuller, III acquired a controlling interest in the company.

In June 1996, Genesee & Wyoming went public by way of initial public offering (IPO) and concurrent secondary offering, raising US 451.77 million through the issuance of 3,045,200 shares of Class A Common Stock at US $17.00 per share.

Genesee & Wyoming

News Release

Genesee & Wyoming Inc. to be Acquired by Brookfield Infrastructure and GIC in $8.4 Billion Transaction

• Genesee & Wyoming Inc. stockholders to receive $112 in cash per share of common stock
• The price represents a premium of 39.5% to G&W’s unaffected per share price on March 8, 2019, the day prior to initial media speculation of a potential transaction
• Brookfield Infrastructure and GIC will be acquiring a North American rail business with significant scale
• The transaction has received the unanimous approval of G&W’s Board of Directors and is subject to approval by G&W’s stockholders

BROOKFIELD, NEWS, July 01, 2019 — Genesee & Wyoming Inc. (NYSE:GWR) (“G&W”), together with Brookfield Infrastructure (NYSE: BIP; TSX: BIP.UN), GIC and Brookfield Infrastructure’s institutional partners (together referred to as the “Consortium”), are announcing an agreement pursuant to which affiliates of Brookfield Infrastructure and GIC will acquire G&W in a transaction valued at approximately $8.4 billion including debt (the “Transaction”). The Transaction will result in G&W becoming a privately held company. Under the new ownership, G&W will continue to focus on world class safety and outstanding service, while pursuing the company’s strategic goals.

G&W owns a portfolio of 120 short line railroads, predominantly in North America, with operations in Europe and Australia. Through its subsidiaries worldwide, the business provides essential transportation infrastructure services over more than 26,000 kilometers of track, providing access to its well-diversified customer base.

“We believe this transaction is an excellent outcome for all G&W stakeholders,” said Jack Hellmann, G&W Chairman and Chief Executive Officer. “For our current stockholders, the sale price realizes significant value and represents a 39.5% premium to our March 8th share price. And for long-term investors who have owned our shares for the past two decades, the sale price represents a return of more than 5,400%.”

“For our customers, employees, and Class I partners, the long-term investment horizon of Brookfield Infrastructure and GIC as seasoned infrastructure investors is perfectly aligned with the long lives of G&W railroad assets, which are integral to the local economies that we serve in North America and around the world,” Hellmann continued. “They are also fully supportive of our business plan, which will continue to be focused on safety, customer service, and growing our footprint to provide more opportunity for our people. We also expect this transaction will allow us to further enhance our business as we benefit from Brookfield Infrastructure/GIC’s expertise in real estate and technology, as well as relationships with their railcentric/complementary portfolio companies.”

“This is a rare opportunity to acquire a large-scale transport infrastructure business in North America,” said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure. “G&W will be a significant addition to our global rail platform and will expand our presence in this sector to four continents. G&W provides critical transportation services to more than 3,000 customers, and its cash flows have proven to be highly resilient over many years. Brookfield Infrastructure is well suited to work with the company to continue to improve the business, given our significant experience owning and operating rail, ports and other large scale, transportation infrastructure businesses.”

Ang Eng Seng, Chief Investment Officer for Infrastructure at GIC, said, “As a long-term investor, GIC is confident G&W will continue to generate steady profitability, given its diversified operations and customer base. We look forward to partnering with G&W’s management and Brookfield Infrastructure to support the future growth of the company.”

Transaction Details

Pursuant to the agreement, each issued and outstanding share of G&W will be converted into the right to receive $112 per share in cash. The Transaction price of $112 per share of G&W common stock represents a 39.5% premium to the unaffected per share price of $80.28 on March 8, 2019, the day prior to initial media speculation of a potential transaction. The Transaction is expected to close by year end or early 2020 and is subject to customary closing conditions, including approval by G&W stockholders holding 66 2/3% of the outstanding common stock, required regulatory approvals that include approval by the Committee on Foreign Investment in the United States, the U.S. Surface Transportation Board, and certain competition and antitrust approvals.

Due to the pending sale, G&W will cease reporting monthly carloads and will not hold a conference call for its second quarter 2019 financial results. G&W expects to file its second quarter 2019 10-Q by close of business on August 9, 2019.

Funding

Brookfield Infrastructure’s investment will be approximately $500 million of equity. The remainder of the business will be owned by Brookfield Infrastructure’s institutional partners and GIC. Brookfield Infrastructure’s investment will be funded from existing liquidity which totaled approximately $1.9 billion at June 30, 2019.

Advisors

Citigroup Global Markets Inc. is serving as financial advisor to the Consortium. White & Case LLP is serving as lead legal advisor to the Consortium, along with McCarthy Tétrault LLP, Gilbert + Tobin and Steptoe & Johnson LLP who are also serving as legal advisors to the Consortium. Torys LLP is serving as legal advisor to Brookfield Infrastructure and Sidley Austin LLP is serving as legal advisor to GIC. Financing for the Consortium will be led by a syndicate of banks including Credit Suisse, Wells Fargo Securities, LLC, Citigroup Global Markets Inc. and RBC Capital Markets.

BofA Merrill Lynch and Morgan Stanley & Co LLC served as financial advisors to G&W. Simpson Thacher & Bartlett LLP, as well as Addleshaw Goodard LLP, Allens, Clark Hill PLC, Macfarlanes LLP and Stikeman Elliott LLP served as legal advisors to G&W. In addition, Wachtell, Lipton, Rosen & Katz served as counsel to G&W’s board of directors.

– ends –

Genesee & Wyoming Inc. (G&W) owns or leases 120 freight railroads organized in eight locally managed operating regions with approximately 8,000 employees serving 3,000 customers.
• G&W’s six North American regions serve 41 U.S. states and four Canadian provinces and include 114 short line and regional freight railroads with more than 13,000 track-miles.
• G&W’s Australia Region serves New South Wales, the Northern Territory and South Australia and operates the 1,400-mile Tarcoola-to-Darwin rail line. The Australia Region is 51.1% owned by G&W and 48.9% owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets.
• G&W’s UK/Europe Region includes the U.K.’s largest rail maritime intermodal operator and second-largest freight rail provider, as well as regional rail services in Continental Europe.

G&W subsidiaries and joint ventures also provide rail service at more than 40 major ports, rail-ferry service between the U.S. Southeast and Mexico, transload services, contract coal loading, and industrial railcar switching and repair. For more information, visit gwrr.com.

Brookfield Infrastructure Partners is a leading global infrastructure company that owns and operates high quality, long-life assets in the utilities, transport, energy and data infrastructure sectors across North and South America, Asia Pacific and Europe. We are focused on assets that generate stable cash flows and require minimal maintenance capital expenditures. Brookfield Infrastructure Partners is listed on the New York and Toronto stock exchanges. Further information is available at www.brookfieldinfrastructure.com.

Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Asset Management, a leading global alternative asset manager with over $365 billion of assets under management. For more information, go to www.brookfield.com

GIC is a leading global investment firm established in 1981 to manage Singapore’s foreign reserves. As a disciplined long-term value investor, GIC is uniquely positioned for investments across a wide range of asset classes, including equities, fixed income, private equity, real estate and infrastructure. In infrastructure, GIC’s primary strategy is to invest directly in operating assets with a high degree of cash flow visibility and which provide a hedge against inflation. GIC has investments in over 40 countries. Headquartered in Singapore, GIC employs over 1,500 people across 10 offices in key financial cities worldwide. For more information on GIC, please visit www.gic.com.sg or LinkedIn.

For more information, please contact:

Media – G&W:
Michael Williams
Vice President, Corporate Communications
Tel: (203) 202-8916
Email: mwilliams@gwrr.com

Investors – G&W:
T.J. Gallagher
Chief Financial Officer
Tel: (203) 202-8904
Email: tjgallagher@gwrr.com

Media – Brookfield:
Suzanne Fleming
Managing Partner, Communications
Tel: (212) 471-2421
Email: suzanne.fleming@brookfield.com

Investors – Brookfield:
Melissa Low
Vice President, Investor Relations
Tel: (416) 956-5239
Email: melissa.low@brookfield.com

Media – GIC:
Mah Lay Choon
Senior Vice President
Corporate Affairs & Communications
Tel: (+65) 6889 6841
Email: mahlaychoon@gic.com.sg

Wendy Wong
Senior Vice President
Corporate Affairs & Communications
Tel: (+65) 6889 6928
Email: wendywong@gic.com.sg

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.