In an effort to diversify, CIT Group Inc. (CIT - Free Report) announced the acquisition of Nacco SAS – a premier full-service wagon leasing company headquartered in Paris. The terms of the deal, however, were kept confidential.
Nacco owns around 9,500 wagons and offers its services to about 150 customers in 16 countries. The company also operates subsidiaries in Hamburg, Germany, and Crewe, United Kingdom.
Nacco's wagons include tank cars, flat cars, gondolas and hopper cars that service the petroleum, chemical and petrochemical industries, as well as industries related to transportation of fertilizers, minerals, timber, steel, aggregates and agricultural products.
The Senior Vice President and General Manager of Locomotives for CIT Rail, will serve as the President of Nacco. In addition, the integrated unit will now be branded as Nacco, A CIT Company.
Europe ranks among the leading freight rail markets and CIT Group's foray into this market will provide an added boost to its rail leasing platform. Additionally, it will provide an opportunity for the company to become a premier provider of global transportation finance solutions.
Additionally, partnering a premier firm like Nacco will provide CIT Group the opportunity to use the former's expertise and reputation to tap customers for growing market share in Europe. This is expected to mitigate the stringent regulations and a weak economic recovery in the U.S.
CIT group currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include American Express Company (AXP - Free Report) , Financial Engines, Inc. (FNGN - Free Report) and Moody's Corporation (MCO - Free Report) . All these stocks carry a Zacks Rank #2 (Buy).