Genesee & Wyoming purchases Georgia-Pacific's three short lines (12/22/2003)
12/22/2024Genesee & Wyoming Inc. (GWI) recently reached an agreement with Georgia-Pacific Corp. to acquire the building-product and paper shipper's three short lines for $55.6 million, and provide Georgia-Pacific facilities rail service for 20 years.
GWI will acquire the 15-mile Chattahoochee Industrial Railroad (CIRR), 53-mile Arkansas, Louisiana & Mississippi Railroad Co., and 57-mile Fordyce & Princeton Railroad Co., which recently reported annual combined revenue of $18 million — 90 percent generated by Georgia-Pacific.
"The heavy switching nature of the railroads and their geographic proximity to other Rail Link operations make this an excellent strategic fit, and we see significant opportunity to enhance the service and operating efficiency of the railroads," said GWI Chairman and Chief Executive Officer Mortimer Fuller III in a prepared statement, referring to industrial-switching and logistics provider subsidiary Rail Link Inc., which serves industrial customers in 10 southeastern states and operates seven short lines.
GWI plans to fund the acquisition through an existing $223 million revolving credit facility. The transaction is expected to increase the short-line holding company's total debt-to-capitalization ratio to 36 percent.
Subject to regulatory approval and other customary closing conditions, the transaction is expected to close Dec. 31.
GWI owns or retains interest in more than 20 regionals and short lines in the United States, Canada, Mexico, Bolivia and Australia.
Source: Progressive Railroading Daily News