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Grupo México to acquire Florida East Coast Railway in US$2.1B deal

Grupo México will purchase Florida East Coast Railway Holdings Corp., or FEC, for US$2.1 billion, including debt, in a move that it said March 28 will boost EBITDA for its transport division by about 20%.

It highlighted the fact that, under the deal, Grupo México will not only acquire 100% of FEC's stocks, but also all of the company's assets and land, "contrary to Mexico, where concessions acquired award only rights of way for a given time".

To finance the move, Grupo México is using US$350 million of its own capital along with US$1.75 billion in debt with different maturities.

Grupo México said this deal is the latest in the company's "aggressive investment" plan, and following the acquisition, EBITDA for its transport division will rise from US$775 million in 2016 to US$930 million, pro forma.

In February, the group reported that its EBITDA for the fourth quarter of 2016 amounted to US$905 million, up by 52% from the same period in 2015.

FEC owns 565 kilometers of track that offers railway services along the east coast of Florida and supplies the Miami, Everglades and Palm Beach ports in South Florida.