Darby Backs Alta Rail Technology

Darby Private Equity, the private equity arm of Franklin Templeton Investments, has put $15 million into Alta Rail Technology, a supplier of technology products and services to railroads. The firm invested out of Darby Latin American Mezzanine Fund II, L.P. Other terms of the deal were not disclosed.

Darby Private Equity (“Darby”), the private equity arm of Franklin Templeton Investments, announced that Darby Latin American Mezzanine Fund II, L.P. (“DLAMF II”) completed an investment of US$15 million in Alta Rail Technology (“ART”), a leading supplier of technology products and services to railroads worldwide. Transaction details were not disclosed.

ART combines the business of three Brazilian rail technology providers: ALL Rail Technology, previously belonging to publicly traded Brazilian railroad ALL – América Latina Logística, Daiken Ferroviária and Engesis Engenharia e Sistemas. ART is a leading global provider of rail technology services, with 100 employees and one of the broadest product suites in the industry, with offices in Curitiba and Vitória in Brazil and Johannesburg in South Africa. Its clients include large railroads in the Americas, Africa, Asia and Oceania.

Richard Frank, Jr., Darby’s Managing Director responsible for DLAMF II, commented, “We are very pleased to have concluded this investment in ART as it reinforces Darby’s longstanding commitment to investing in the region and specifically in Brazil. We are attracted to ART because of its strong industry leadership in emerging markets, its successful track record of developing innovative solutions for its clients in Brazil and abroad, as well as the favorable outlook for the rail sector worldwide.”

Carlos Henrique Correa, ART’s Chairman and CEO who led the formation of the new company, commented, “Darby’s investment allowed us to consolidate ART as an integrated rail technology provider with a global client base. The capital we received will be used to develop new technologies for our clients and expand our product offering to new markets.”

The investment in ART adds to Darby’s long history of successful investments in Latin America and follows the success of the Darby Latin American Mezzanine Fund I with 12 investments, all of which have been realized. Darby has played a pioneering role in bringing private equity and mezzanine—a hybrid of both debt and equity—to emerging market regions, initially Latin America, then to Asia and most recently to Central and Southeastern Europe.

Darby Overseas Investments, Ltd. was founded in 1994 by The Honorable Nicholas F. Brady, who served as U.S. Secretary of the Treasury between 1988 and 1993. Richard Frank joined the firm as CEO in 1997 after his career at the International Finance Corporation (IFC)/World Bank. In 2003, Darby became a fully owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. For more information please visit darbyoverseas.com.

Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2 investment teams. The San Mateo, CA-based company has more than 65 years of investment experience and over US$823 billion in assets under management as of March 31, 2013.