GATX Corp. selling its terminals division
Chicago-based GATX Corp. said July 11 that it would put its terminals subsidiary on the market so that the parent company could focus on expanding its rail and capital businesses.
The division to be sold, GATX Terminals Corp., focuses on storage and distribution of bulk petroleum and chemical products.
"GATX Terminals has been a leading provider of storage and distribution services to petroleum and chemical customers worldwide for more than 70 years," GATX Corp. Chairman Ronald H. Zech said. "With assets totaling approximately $1 billion in book value, encompassing 17 wholly owned terminaling facilities, ownership or interest in four refined product pipelines, and 11 joint ventures, GATX Terminals represents a valuable franchise. We believe we can maximize this franchise value by aligning GATX Terminals with an owner that is focused specifically on the chemical and petroleum storage and distribution markets."
Zech described GATX Rail and GATX Capital as the company's "two high-return finance and service businesses."
"Our success in these businesses is based on our unsurpassed asset expertise, market knowledge, service capabilities, partnership relationships, and structuring experience," Zech said. "By reallocating capital to these businesses and focusing our management resources, we believe we can drive greater value for our shareholders."
GATX said that GATX Terminals generated $294 million gross income and $26 million net income last year. The company has about 1,000 employees.
Zech said he hoped that a buyer "recognizes the link between the value and expertise GATX Terminals' employees bring to bear and the success GATX Terminals has enjoyed in recent years."
He said GATX expected to reach an agreement with a buyer later this year. No potential buyer was identified.
GATX Corp. said it had retained Salomon Smith Barney Inc. and JP Morgan & Co. as sales advisors.
GATX said that inquiries should be directed to James Peterkin, of Salomon Smith Barney Inc. at (212) 816-0127.