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The UK’s third-largest intermodal operator, GB Railfreight, is set to welcome new owners after Eurotunnel agreed to sell the unit to a Swedish investment fund, EQT Infrastructure.
The fund owns private Swedish rail freight operator Hector Rail and the acquisition is a major plank in its strategy to create “a leading independent pan-European rail freight operator”.
The Eurotunnel board had indicated its intention to step away from the UK rail freight market, but said GB Railfreight’s French operations were not included in the sale.
It said: “The additional liquidity would open up new opportunities for GET [Eurotunnel Group] 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.
“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.,”
With a 15% market share of the UK rail freight market involved, the sale of GB Railfreight to EQT would not need competition commission clearance, and the one remaining obstacle is the consultation process with Eurotunnel staff.
GB Railfreight chief executive and founder John Smith said: “We are very pleased with EQT as our new owner and strongly believe its industrial approach and network, extensive rail freight experience and access to capital will be of valuable support to GB Railfreight in our continued growth ambitions.”
The deal would also see the return of Bo Lerenius, former chief executive of Associated British Ports, to the UK transport sector. Mr Lerenius was head of the UK’s largest port company when it was sold to a Goldman Sachs-led group of investors and delisted from the London Stock Exchange in 2006.
Mr Lerenius is now industrial advisor to EQT and chairman of the Hector Rail Group. He said: “GB Railfreight 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.”
GB Railfreight was bought by Eurotunnel in 2010 for £25m and is this year forecast to hit revenues of £125m. Eurotunnel estimated that its internal rate of return on the business had been just over 28%.
Eurotunnel chief executive Jacques Gounon said: “I am convinced that EQT is the right owner to take GB Railfreight to the next level, given its 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.”
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