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Yesterday, RailAmerica Inc. announced it signed separate agreements to acquire employee-owned Marquette Rail L.L.C. for $40 million, and acquire a 70 percent interest in the Wellsboro and Corning Railroad (WCOR) and Industrial Waste Group (IWG) from Myles Group L.L.C. for $18 million.

The Marquette Rail acquisition is subject to final adjustments for working capital, customary closing conditions and Surface Transportation Board approval. Marquette Rail operates 126 miles of track from Grand Rapids to Ludington and Manistee, Mich. The short line interchanges with CSX Transportation in Grand Rapids and primarily serves chemical, pulp and paper, and non-metallic product shippers.

“The acquisition of Marquette Rail represents an attractive opportunity to invest in a high-quality franchise with a solid base of revenue from large, long-term customers and drive substantial near-term growth from new developments on the line,” said RailAmerica President and Chief Executive Officer John Giles in a prepared statement. “In addition, the railroad is in close proximity to RailAmerica's existing Michigan operations, which we expect will create significant operating efficiencies.”

In terms of the WCOR and IWG transaction, Myles Group members will retain the remaining 30 percent interest in the companies and continue to serve in senior leadership roles. Subject to customary closing conditions, the acquisition is expected to be completed early in the second quarter.

WCOR operates 38 miles of track from Wellsboro, Pa., to Corning, N.Y. RailAmerica expects the short line to experience rapid traffic growth and expand its freight and non-freight services to support development of the Marcellus Shale’s natural gas industry. IWG provides transload, storage and other services for customers in the energy and waste management industries at four transloading facilities in Wellsboro, Corning, Toledo, Ohio, and Amelia, Va.

“The rail and transloading infrastructure at Wellsboro is uniquely located in the heart of the northern Marcellus Shale and represents a key asset in the transportation of both inbound and outbound products for major exploration and production companies,” said Giles, adding that RailAmerica also can leverage the Myles Group's expertise to open other transload facilities throughout the nation.

RailAmerica plans to finance both acquisitions with cash on hand and a revolving credit facility.