- Rail transport company Aurizon (AZJ) agrees to purchase One Rail Australia for $2.35 billion
- One of One Rail assets includes the 2200 kilometre railway line from South Australia’s Tarcoola to Darwin in the Northern Territory
- Aurizon believes the acquisition will allow the company to haul more commodities such as manganese rare earths, copper, iron ore and grain
- For the deal to be completed it is subject to a number of conditions, including approval from the Australian Competition and Consumer Commission
- On the market, Aurizon is down 4.37 per cent and is trading at $3.72 per share at 1:34 pm AEDT
Aurizon (AZJ) has signed an agreement with Macquarie Asset Management to purchase One Rail Australia for $2.35 billion.
One Rail owns bulk rail haulage and general freight assets in South Australia and the Northern Territory. This includes the 2200 kilometre Tarcoola-to-Darwin railway line, home to the well known train The Ghan.
It also has a haulage business in New South Wales and Queensland.
Aurizon believes the acquisition will allow the company to haul more commodities such as manganese rare earths, copper, iron ore and grain.
For the deal to be completed it is subject to a number of conditions, including approval from the Australian Competition and Consumer Commission.
The purchase is fully funded from a combination of Aurizon’s existing debt facilities and underwritten by new committed debt facilities.
Notably, One Rail is a profitable business with an aggregate estimated earnings before interest tax, depreciation and amortisation of $220 million for the current 2021 year.
Aurizon’s Managing Director and CEO, Andrew Harding, said the purchase will offer a unique opportunity to grow the company’s business.
“The One Rail acquisition is highly strategic and transformative for Aurizon. It is fully aligned with Aurizon’s strategy to grow our Bulk freight business into new markets and new geographies in Australia,” Mr Harding said.
“At our Investor Strategy Day in June, we detailed our aspiration to double our earnings in the Bulk business over the coming decade. The One Rail acquisition delivers a step change for Aurizon Bulk as a new entrant in the SA and NT region, and supports the ongoing growth of non-coal revenue in the Aurizon portfolio.”
Aurizon is expecting the deal to be completed in the first four months of 2022.
On the market, Aurizon was down 4.37 per cent and is trading at $3.72 per share at 1:34 pm AEDT.