American Track Services, a portfolio company of DFW Capital Partners, has acquired Universal Rail Systems from TorQuest Partners. With the acquisition of Universal Rail, American Track has announced a rebranding of the combined businesses to North American Rail Solutions.
Universal Rail is Canada’s largest provider of infrastructure inspection, maintenance, repair, construction, and safety flagging services to both industrial and Class 1 railroad operators. In Canada, a Class 1 operator refers to an operator of a mainline railway with annual revenue of at least $250 million. Universal Rail is headquartered in Edmonton, Alberta, and operates through 12 regional offices throughout Canada.
American Track is a provider of inspection, maintenance, repair and specialized construction services for railroad infrastructure. Customers of American Track are active in the manufacturing, petrochemical, mining, agricultural products, food and beverage sectors, as well as in the operation of ports and transload facilities across the United States.
Fort Worth, Texas-headquartered American Track is led by CEO Thomas Lucario and operates from 12 full-service branch offices in Colorado, Florida, Nevada, North Carolina, Oklahoma, Pennsylvania, Texas, Utah, and Wyoming.
American Track was formed in 2016 through a consolidation of two family businesses – Texas-based American Track Generations and Florida-based C.J. Bridges Railroad Contractor – in partnership with Hilltop Private Capital, Deerpath Capital, and PNC Mezzanine.
DFW acquired a majority equity interest in American Track in December 2021 and closed the add-on acquisition of The Railroad Associates Corporation (TRAC) in March 2022. The combined operations of North American Rail Solutions will serve Canadian customers under the Universal Rail brand and United States customers under the American Track brand.
“Less than 18 months after our original investment in American Track, we have become the leading North American provider of rail inspection, maintenance, repair, and niche construction services to industrial customers,” said Keith Pennell, the managing partner of DFW. “With the addition of Universal Rail, we will not only broaden our footprint into Canada but build upon established relationships and proven capabilities in the Class 1 and transit segments – all while partnering with a first-class team of industry veterans.”
Thomas Lucario, the current chief executive officer of American Track, will serve as CEO for North American Rail Solutions, American Track, and Universal Rail; and Tim McMillan will serve as president and chief operating officer of Universal Rail, lead operations in Canada, and he will join the board of directors of North American Rail Solutions.
“The creation of North American Rail Solutions along with the consolidation of American Track and Universal Rail will create increased capabilities that are unmatched in the industry,” said Mr. Lucario. “As a team of proactive experts with unparalleled industry experience, we are able to deliver the largest and most trusted rail services platform in North America.”
DFW invests in service companies, with an emphasis on outsourced business and industrial support services, and healthcare companies that have revenues up to $200 million and EBITDA up to $20 million. In January, DFW held a final, oversubscribed, and hardcap close of DFW Capital Partners VII LP with $800 million of capital. Fund VII follows the firm’s sixth fund which held its first and final closing in April 2019 with $500 million of capital. DFW is headquartered in Teaneck, New Jersey, with an additional office in Chevy Chase, Maryland.
TorQuest Partners, the seller of Universal Rail, invests in middle-market companies with typical transactions involving entrepreneur or family succession, recapitalizations, corporate carve-outs, and management buyouts. TorQuest was founded in 2002 and is headquartered in Toronto.
“We are proud of the partnership we have built with the Universal Rail management team over the years and wish them continued success in this new chapter with North American Rail Solutions,” said Mike Salisbury, a principal at TorQuest.
Northborne Partners and Lazard were the financial advisors to Universal Rail on this transaction.
© 2023 Private Equity Professional | May 11, 2023
