Watco acquires rail infrastructure assets and related equipment from Dow

Watco has acquired rail infrastructure assets and related equipment from Dow, Inc. at six major North American sites. Watco said: “This represents a revolutionary approach to industrial in-plant operations.”

Watco will now provide select rail services at Dow’s plants in Freeport and Seadrift, Texas; St. Charles and Plaquemine, Louisiana; and Fort Saskatchewan and Prentiss, Alberta.

Dan Smith, Watco CEO, said: “We are grateful for the confidence Dow has shown in Watco by trusting us with this critical role. This represents a revolutionary approach to industrial in-plant rail operations and we’re proud to help Dow create value for many years to come.”

As North America’s largest olefins and polyethylene manufacturer, Dow expects to receive more than $310 million in cash as part of the transaction, which is expected to close in the fourth quarter pending customary closing conditions. Fourteen Dow employees and management responsibility for about 400 contract workers are expected to transition to Watco after the transaction closes.

Watco’s “significant rail expertise and capabilities” will generate additional operational efficiencies and provide growth opportunities over time, Dow officials said. The transaction aligns with the company’s strategy to continue to grow core businesses in a capital-efficient manner, they added.

Dow Chairman and CEO Jim Fitterling, said: “The transaction will liberate cash from our balance sheet that we will use to pay down debt and invest in our core value-generating businesses.” 

To execute the transaction, Watco plans to partner with the transportation infrastructure group that manages an infrastructure investing strategy and funds for Oaktree Capital Management LP, a Watco investor.

For more information visit www.watcocompanies.com

7th July 2020