Talgo has won a €1.6 billion contract win with the Saudi Railways Organisation

Trilantic Capital Partners (“Trilantic”), the transatlantic private equity firm, is pleased to announce that Talgo has won a €1.6 billion contract win with the Saudi Railways Organisation.

PATENTES TALGO S.A. (“Talgo”) is a leading train manufacturer in Spain, specialising in the design and manufacture of high-speed (350km/h) and intercity trains (250km/h), together with providing maintenance, repair and overhaul services for those trains. Trilantic invested in Talgo in 2006 and has since then supported the company on its successful internationalisation strategy which resulted in 92% of Talgo’s signed contracts in 2011 coming from international projects.

A Spanish Consortium with Talgo as its largest participant officially signed in Riyadh, Saudi Arabia a 12-year High Speed mega contract with the Saudi Railways Organisation (“the client”), valued at €6.7 billion, to construct, operate and maintain one of the key railway links in the Middle East: the Haramain High Speed Railway, connecting Mecca and Medina. Once completed, this 450 km high speed line will see trains operate at speeds of over 300 km/h transporting more than 160,000 passengers per day between the two Holy Cities in just two hours.

Talgo’s responsibility within the Spanish Consortium is the construction of 35 trains and 12 years of maintenance services worth €1.6 billion. The train model is the Talgo 350, known as “El Pato” (Duck shape). It is the leading high speed train in Spain, which has been fully adapted to the severe climatic conditions of Saudi Arabia. In addition, the client has an option to purchase an additional 20 trains, which would increase the contract size to €2.4 billion.

The award of this important flagship project is a historic milestone for the Spanish industry and railway technology on a global perspective, in a market traditionally dominated by Japan, Germany and France, and represents the largest export contract ever awarded to Spanish companies.

Vittorio Pignatti-Morano, Founding Partner and Chairman of Trilantic Capital Partners Europe, commented: “The signing of the high speed rail contract in Saudi Arabia is a key milestone both for the Spanish rail industry and a significant endorsement of Talgo’s technology and international growth prospects. Talgo won this contract in the face of stiff competition from other leading high speed rail players and this success will no doubt serve as a platform for future international tendering processes of high speed projects in other parts of the world.