M&A Summary

Genesee & Wyoming acquires RailAmerica

Genesee & Wyoming Inc (GWI) and RailAmerica jointly announced that they have entered into an agreement under which GWI will acquire RailAmerica for an all cash purchase price of $27.50 per share. GWI’s acquisition of RailAmerica will combine the two largest short line and regional rail operators in North America, strengthening GWI’s ability to serve its industrial customers and Class I railroad partners.
The acquisition is subject to the US Surface Transportation Board’s (STB) formal approval of GWI’s control of the RailAmerica railroads. GWI expects to close the transaction into a voting trust as early as the third quarter of 2012, while it awaits formal STB approval. Upon approval, expected in the fourth quarter of 2012, GWI would be able to fully integrate RailAmerica.
Using the previously reported results of GWI and RailAmerica, the transaction increases GWI’s total revenues by nearly two-thirds to approximately $1.4bn and doubles North American revenue to approximately $1.1bn. Following the transaction, GWI will have 111 railroads (108 in North America), 15,100 miles of track (12,900 in North America), 1.8m carloads (1.6m in North America), 1,000 locomotives (900 in North America) and 4,300 employees (3,900 in North America).
Jack Hellmann, President and CEO of GWI commented, “The acquisition of RailAmerica by GWI is a straightforward combination of two organizations with overlapping holding company structures and complementary railroad geographies. As a result, the synergies between the companies are expected to be significant, and we anticipate unlocking significant shareholder value.”

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