A couple of months after the Virgin Group and Miami-based Brightline formed a strategic partnership to expand the United States first privately funded intercity passenger train in more than 100 years, Virgin Trains USA has announced the launch of an initial public offering.
Virgin, which operates trains in Europe, is looking to sell 28 million shares of common stock for $17 to $19 per share to raise roughly $500 million to expand rail operations. Brightline currently operates passenger rail service between Miami, Fort Lauderdale and West Palm Beach, with plans to expand into Orlando and Tampa — and plans in 2020 to begin construction on passenger service between Southern California and Las Vegas.
Brightline and its cohort of private investors are aiming to leverage the Virgin brand and marketing expertise to boost its existing and future developments, in part by reflagging the company Virgin Trains USA, a moniker that will make it familiar to many international travelers. Brightline began South Florida rail operations in early 2018, and the Virgin Group announced their partnership on Nov. 16.
At that time, Wes Edens, chairman of Brightline and co-founder of Fortress Investment Group, an investment manager with about $42 billion in assets under management, said: “Virgin has built a respected and trusted brand in travel and hospitality. With our shared focus on customer experience, powered by a culture of innovation and disruption, we are well positioned to build on our success.”
Richard Branson, founder of Virgin, said Brightline was the “ideal partner for Virgin to work with to alter perceptions and traveling habits across the United States.”
Virgin Group made a minority investment in Brightline, while Fortress Investment Group has retained majority ownership, and Brightline’s current management team will oversee daily operations, engineering, business development and strategy, even as Brightline is in the process of rebranding itself Virgin Trains USA.
The company’s IPO prospectus has forecast that service between Miami and Tampa through Orlando has the potential to carry 9.5 million passengers annually.
Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser. Follow him on Twitter @mikeconsol to read his latest postings.