x

All about the community of model railroading and rail enthusiasm

COWCATCHER MAGAZINE

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.

Current Issue: November/December 2023

HEAVY DUTY

Model railroad manufacturers are intent on bulking up their locomotives, but they aren't sending them to the gym. HO-scale long-haul and switch engines recently released have been upgraded to meet demand for more pulling power. At least two manufacturers have repowered motors and added a few more ounces for dependability to move long cuts of cars.

GROWTH POTENTIAL

For the first time in its history, the Arizona Eastern Railway has a classification yard that will augment capacity from a storage loop track in Lordsburg, NM. The new Summit Yard, a joint project between AZER and Freeport-McMoRan, adds 24,000 feet of track to handle more cars for interchange with Union Pacific. 

NEW N-SCALE F7S AIM TO PLEASE

InterMountain Railway Co. has released an updated version of its N-scale EMD F7A and F7B locomotives that are among the best-detailed "covered wagons" ever produced. See our product review.

PLUS

A Colorado modeler who picked up modular railroading a few years ago scores big at the 2023 NMRA National Convention. Altoona N-scalers salute the late founder of an annual weekend event by establishing a new award recognizing excellence. And the Nebraska Central Railroad will begin hauling crushed soybeans and soybean oil, to be used in producing renewable energy, next year.