Icahn sells American Railcar for $1.34B

ST. CHARLES, Mo. — Billionaire investor Carl Icahn agreed to sell American Railcar Industries Inc. for $1.34 billion, quintupling his investment as a freight boom spurs a rebound in demand for rail equipment.

Icahn Enterprises agreed to sell the maker of tank and hopper cars at $70 a share, 51 percent above its closing price Friday, to a subsidiary of hedge fund ITE Management. The deal is valued at $1.75 billion including debt, St. Charles, Mo.-based American Railcar said in a statement Monday.

American Railcar has manufacturing facilities in Paragould and Marmaduke.

Rail carloads are climbing as the robust U.S. economy drives freight demand and as a shortage of truck drivers pushes some cargo to trains. Orders for freight cars jumped 35 percent to 23,788 in the second quarter from a year earlier, according to the Railway Supply Institute. It was the biggest quarter for rail-car orders since the end of 2014.

Icahn’s sale marks a retreat from a previous attempt to consolidate the rail-equipment industry after he acquired a majority interest in American Railcar in 2010.

Icahn Enterprises said the investment in American Railcar has generated a total return of 423 percent. He stepped down as chairman of the company in 2014.

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