EQT launches bid for GB Railfreight

The Eurotunnel Group (GET) has received a binding and irrevocable offer from Swedish private equity group EQT Infrastructure, for the potential acquisition of its subsidiary, GB Railfreight (GBRf), the third largest rail freight operator in the UK.

The offer, submitted through an indirectly owned subsidiary of Hector Rail Group, Sweden, is part EQT’s strategy to create a “leading independent pan-European rail freight operator”.

GET acquired GBRf in 2010 for £25 million and has more than doubled its activities, leading to forecast revenues of approximately £125 million whilst at the same time significantly improving its profitability.

Founded in 1999 by the current CEO John Smith, GBRf is the third largest rail freight operator in the UK, and provides a wide range of rail transport solutions and rail services to its customers.

The company’s team of 650 people operates more than 1,000 trainloads a week, moving approximately 15% of UK’s rail freight. GBRf has a fleet of more than 130 locomotives and 1,100 wagons, transporting goods for customers including Drax, Network Rail, EDF Energy, MSC UK, Aggregate Industries and Tarmac.

GBRf’s CEO and founder John Smith, said: “We would be very pleased with EQT as our new owner and strongly believe that EQT’s industrial approach and network, extensive rail freight experience and access to capital would be of valuable support to GBRf in our continued growth ambitions.”

Bo Lerenius, Industrial Advisor to EQT and Chairman of the Hector Rail Group, said: “GBRf is a company that understands its customers, staff, and the industry in which it operates. The focus on innovation and delivery of outstanding customer service are two key factors that make us believe that GB Railfreight would be an excellent fit with Hector Rail. We look forward to working in close partnership with GBRf’s management team, to support the company in its continued growth ambitions.”

Following the consultation and acceptance of the offer, the additional liquidity would open up new opportunities for GET to develop its core infrastructure and transport business, particularly through the delivery of the ElecLink electrical interconnector project, for which the construction works are now getting under way.

The Group’s French rail freight activities, managed by Europorte in France, are not included in the offer received. Europorte France will remain focused on its own development to deliver constantly improved customer service, with the goal of becoming the foremost private rail freight operator in France.

Jacques Gounon, Chairman and Chief Executive Officer of Groupe Eurotunnel SE, said: “I am convinced that EQT is the right owner to take GBRf to the next level, given their strong focus on growth and sustainable long term value creation. GBRf has been a great success, proving that significant value can be generated in this sector. On the strength of its results, the Group will continue to favour long term investments and shareholder return.”