Acquisition of RailAmerica complete
October 8, 2012 / Updated October 26, 2012
Short Line Railroads
From news releases
Genesee & Wyoming Inc. announced earlier this month that it has completed the acquisition of RailAmerica, Inc. and entered into a new five-year Senior Secured Credit Facility comprised of a $1.875 billion term loan and $425 million revolving credit facility.
Among railroads that RailAmerica operates is the Dallas, Garland & Northeastern, KYLE Railroad, Texas Northeastern Railroad, Missouri & Northern Arkansas and Kiamichi Railroad.
Immediately following the closing of the acquisition, control of RailAmerica was placed into a voting trust with R. Lawrence McCaffrey appointed as trustee. The trust will remain in effect until the U.S. Surface Transportation Board (STB) issues its decision on GWI’s application to control RailAmerica and its railroads, which decision could be as early as the fourth quarter of 2012 or as late as the first quarter of 2013. During the period that RailAmerica is held in trust, GWI will account for its ownership under the equity method of accounting. Expected cost savings from the business combination will not be realized until the STB approves GWI’s control of RailAmerica’s railroads.
GWI financed the $1.37 billion cash purchase price for RailAmerica’s shares, the refinancing of $1.23 billion of GWI and RailAmerica’s total outstanding debt prior to the acquisition, as well as transaction and financing related expenses with approximately $1.85 billion of debt from its new five-year Senior Secured Credit Facility, approximately $460 million of cash from its recent public offerings of common stock and tangible equity units and $350 million through a private issuance of mandatorily convertible preferred stock to The Carlyle Group.
Growing up in Central Texas in the 1980s, David Heyde loved big machinery. Only natural for a boy surrounded by a mighty river complemented by steamboats, an active Army airfield and regional airport, and equipment that tended row upon row of corn, soybeans and other grains. What loomed largest, though, was the Missouri-Kansas-Texas Railroad. Heyde’s MKT Central Texas Subdivision, a compact but bold HO-scale layout, captures on two levels around the walls the zest of the iconic railroad that ran from Kansas City and St. Louis to Galveston, TX, and the Gulf of Mexico. All while maximizing space in what once was a one-car garage.
This year’s National Narrow Gauge Convention is coming home, where it all began 45 years ago. The Mudhens will once again have a large presence at the convention Sept. 3-6 in St. Louis. Over the last four decades, their rise has been rather circuitous. While developing national appeal in narrow-gauge circles, these dedicated modelers from St. Louis to Arizona to Texas have persevered.
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