Today, Genesee & Wyoming Inc. (GWI) signed an agreement with Bethlehem Steel Corp. to purchase 52-mile South Buffalo Railway Co. (SB) for $33.1 million cash and $3.3 million in assumed liabilities.
GWI plans to operate the short line, which connects to the holding company's 369-mile Buffalo & Pittsburgh Railroad Inc., as part of its New York-Pennsylvania region led by Senior Vice President David Collins.
GWI officials believe SB, with connections to CSX Transportation, Norfolk Southern Railway, Canadian National Railway Co. and Canadian Pacific Railway, has significant growth prospects. The holding company is considering combining rail with Port of Buffalo to move coal, salt and stone to and from the Great Lakes, and expects in mid-October to begin providing rail service to a new lumber transload facility along SB's line.
"SB represents our seventh major acquisition in the New York-Pennsylvania region and builds this property to more than $50 million in revenue," said GWI Chairman and Chief Executive Officer Mortimer Fuller in a prepared statement.
GWI, which currently owns and operates 12 regionals and short lines in the United States, Canada, Mexico and Australia, plans to fund the SB acquisition through its $103 million revolving credit facility that has $75 million in available funds. The holding company expects to close the transaction within a week pending customary closing conditions.
Source: Progressive Railroading Daily News
