RICHMOND, Va. -- The Brink's Co., known for its armored-vehicle services, said Wednesday it agreed to sell its BAX Global freight-shipping division to German railroad Deutsche Bahn AG for $1.1 billion.
The all-cash deal will allow Richmond-based Brink's to concentrate on its security services. For years, the company has been narrowing its focus, starting with its exit from the coal business.
Michael Dan, chief executive of Brink's, said the upcoming sale is an important milestone for the company. "We'll be strictly a security company," he said in an interview, adding that being in one industry provides more clarity.
The sale did not come as a surprise. A published report over the summer noted that BAX was up for grabs. But the speculated amount _ $500 million _ was far lower, perhaps because the estimate was based on acquisitions of companies not as healthy as BAX Global.
BAX Global's operating profit soared to $56.2 million last year from $3 million in 2003, while the unit's revenue rose 22 percent to $2.44 billion.
Other companies probably bid on the division, too. When asked whether other companies made offers, Dan was coy. "It was a very, very robust process that went on for a period of months," he said.
BAX Global, which is based in Irvine, Calif., ships heavyweight cargo internationally and provides transportation logistics. It employs more than 12,000 people globally.
Government-owned Deutsche Bahn, which is preparing for its eventual privatization, said BAX Global is a good fit with the company's Schenker logistics unit. The acquisition will allow it to significantly expand its position in air and sea freight, while building its presence in North America and Asia.
The acquisition, which is expected to be completed around year's end, is subject to regulatory approval.
Brink's intends to use at least $200 million of the net proceeds from the sale to fund retiree medical costs and up to $600 million to repurchase shares of the company. It could also use funds to reduce debt levels and to support future growth.
Brink's shares fell 18 cents to $47.80 in afternoon trading on the New York Stock Exchange, but are still near the upper end of their 52-week range of $29.73 to $49.14.