After partnering with Richard Branson, Brightline is now Virgin Trains
Richard Branson’s Virgin Enterprises Limited has announced the purchase of a minority share of Miami-based Brightline; with the acquisition, the company will be known as Virgin Trains USA as part of the licensing agreement. Soon after the purchase announcement, the company filed to go public.
Branson, who visited Brightline operations about a year ago, said: “It was clear from that our first visit that Wes Edens, Brightline’s founder, and his team had an exciting vision and the skills for American rail travel that no other private American enterprise has been able to do for a century.”
The company plans to be listed on Nasdaq under the symbol VTUS and up to $ 100 million in shares will be sold, although the numbers are not official. Separately, Branson agreed to buy an undisclosed amount of shares from the company with the same share price as the IPO value.
Virgin, who is also in the process of opening a cruise line headquartered in Miami with their first ships also based here, expects the passenger train operations in Florida to generate $810 million in revenue, including $700 million in tickets and $ 110 in ancillary revenue, when expansions to Tampa are completed. The expansion to Orlando is under construction at the moment.
More about the acquisition announcement below:
BRIGHTLINE FORMS STRATEGIC PARTNERSHIP WITH VIRGIN
EXPRESS INTERCITY PASSENGER RAIL SYSTEM TO BECOME VIRGIN TRAINS USA
MIAMI, Fla. – November 16, 2018 –
Today Brightline, America’s first new major private intercity passenger railroad in over a century, announced a new strategic partnership and trademark licensing agreement with the Virgin Group, one of the world’s most recognizable brands in travel and hospitality. The partnership will allow Brightline to leverage Virgin’s industry-leading expertise and customer experience to establish a powerful new brand, “Virgin Trains USA”.
Brightline launched service between Miami, Fort Lauderdale and West Palm Beach in May, 2018. Brightline currently has plans to expand to Orlando and Tampa, and pending the closing of the previously announced XpressWest acquisition and receipt of necessary federal approvals, to begin railway construction next year to connect Las Vegas to Southern California.
“Our private sector-led effort to reinvent passenger rail service in America is taking another leap forward with the addition of the Virgin team,” said Wes Edens, chairman of Brightline and co-founder of Fortress Investment Group. “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.”
Virgin Group has more than 60 companies focused on its core consumer sectors of travel and leisure, telecoms and media, music and entertainment, financial services and health and wellness.
“We have had a lot of fun and success creating innovative transport businesses that shake up markets and establish loyal followings. We transformed domestic air travel with Virgin America. Tens of millions of Americans travel on the railways every day, and we have tried for over a decade to find an opportunity to provide them with that same excellent service experience,” said Sir Richard Branson, founder of Virgin. “Brightline is at the forefront of innovation in this market, and the ideal partner for Virgin to work with to alter perceptions and traveling habits across the United States.”
“This partnership further validates the incredible accomplishments of our team as we challenge conventional wisdom to reinvent train travel in America,” said Patrick Goddard, president of Brightline. “Given our shared values and Virgin’s track record, this partnership will help amplify our efforts and growth potential as we seek to expand to new markets.”
The partnership could help to provide access to millions of customers with the potential for increased ridership from other Virgin branded travel and hospitality businesses, including Virgin Atlantic, Virgin Hotels and Virgin Voyages.
Virgin Group has significant experience operating in the UK rail sector, including its ongoing investment in Virgin Trains, a high speed intercity passenger rail system which it has run for 21 years. Last year passengers took more than 38 million trips on the UK’s West Coast Main Line.
As part of the strategic partnership, an affiliate of Virgin Group has agreed, subject to certain closing conditions, to make a minority investment in Brightline. Funds managed by an affiliate of Fortress Investment Group LLC will retain majority ownership of Brightline. Brightline’s current management team will oversee daily operations, engineering, business development and strategy. Brightline will rename itself Virgin Trains USA this month and transition to Virgin Trains USA branding in 2019.