London: Arcapita Bank, a closely held Bahraini investment bank, agreed to buy UK rail-freight company Freightliner Group, its first investment in the industry.
Arcapita is buying the company from London-based private equity firms 3i Group and Electra Capital Partners, the company said on Saturday. Electra will receive £71.1 million ($138 million) for its 38 per cent stake in the business, it said in a separate statement. That would value the whole company at about £188 million, excluding debt.
Freightliner is second only to English Welsh & Scottish Railway Holdings in the UK rail-freight market and is the country's biggest container-train operator.
Previously a unit of state-owned British Rail, the London-based company was bought by its managers from the government in 1996. Freightliner operates more than 175 locomotives and almost 3,000 wagons between five UK ports and a dozen inland terminals.
"The growth opportunity for rail, as a critical component of national transport strategies, is very promising," Qaisar M Zaman, head of Arcapita's investment business in Europe, said.
Freightliner had an operating profit of £19.7 million on revenue of £255 million in the year through March 2007, according to Electra's annual report.
Trading for the year through March 2008 will only show a "marginal improvement" because of floods and port closures, which hurt revenue from transporting containers inland.
RBC Capital Markets advised Arcapita and is also financing the takeover. NM Rothschild advised Electra on the sale.
