Freightwaves is reporting that 2020 will likely see more mergers and acquisitions (M&As) in the short line rail industry, as private equity firms become more aware of the value of rail infrastructure.
There were many mergers and acquisitions in 2019, and Chicago attorney Bill Kucera was involved in a couple of them this fall. He says “infrastructure is hot, firms have the resources to chase these deals, and these are assets that they think will fit well into their investment profile.”
Private equity firms and other investors are not only interested in rail infrastructure, and have pursued other infrastructure assets like airports, pipelines, toll roads, and ports.
According to M&A advisor Ben Marks, “infrastructure funds really started 10 or 20 years ago, and the idea was more around supporting public-private partnerships. You think about investing in a hundred-year toll road concession or airport operating concession, but the reality is that there are very few of those, and so these infrastructure funds have basically been forced to become more creative with respect to an infrastructure asset.”
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