The Andersons Inc. has struck a deal to buy Mile Rail LLC, a rail-car repair and cleaning service provider in Kansas City, Mo.
Purchase terms were not released but the Maumee agribusiness, which announced the tentative acquisition late Monday, said it expected to finalize the deal some time in the third quarter subject to certain customary closing conditions.
“This acquisition enhances and complements The Andersons’ current rail-car repair network by expanding our geographical footprint and business mix,” The Andersons’ chief executive officer, Mike Anderson, said. “In addition, Mile Rail has an experienced and talented work force with a similar commitment to providing extraordinary customer service.”
In 2012, the Maumee company’s Rail Group was a chief contributor to The Andersons’ strong profits of $79.5 million, and its increased revenues of $5.3 billion.
The Rail Group in 2012 had record operating income — $42.8 million — compared to $9.8 million in 2011. The company said in its annual earnings statement that it expected the Rail Group to have another strong year in 2013.
The Andersons has 14 rail-car repair facilities in Ohio, California, Utah, Iowa, Alabama, Mississippi, South Carolina, and New York. It has no facilities in the nation’s midsection, where Mile Rail is located.
Mile Rail repairs and cleans all types of rail cars containing a range of nonhazardous, hazardous, and food-grade products and wastes at its Kansas City headquarters and at three satellite sites in Nebraska, Kansas, and Indiana. The firm maintains a central Midwest footprint with mobile units too.
“The acquisition of Mile Rail will expand our capabilities to include tank car repair, for which there is a need for additional capacity in the industry, and is expected to increase our rail-car repair revenue by 25 percent,” Rasesh Shah, president of The Andersons’ Rail Group, said. “In addition, with the growth of our fleet, as well as the geographic diversity of our customers, it was becoming strategically important for us to add a second, full-service facility centrally located in the U.S.”
Glen Schwartz, Mile Rail president, said, “Joining The Andersons represents a tremendous opportunity for both our clients and employees. I look forward to continued growth while continuing to exceed our customer’ expectations.”
Andersons’ stock closed at $60.40 a share on the Nasdaq on Tuesday, up from $60.24 the day before, or 0.27 percent.