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COWCATCHER MAGAZINE

Genesee & Wyoming acquires RailAmerica, Patriot Rail Corp. reaches deal to sell

August 2, 2012 / Updated July 25, 2023

Short Line Railroads

Genesee & Wyoming is acquiring RailAmerica, which operates the Dallas, Garland & Northeastern, seen here at Dallas’s Union Station. – Cowcatcher Magazine

From News Releases

Two of the rail industry’s larger regional and short line railroads are getting new owners.

RailAmerica announced in July that it had entered an agreement to sell to Genesee & Wyoming, and Patriot Rail Corp. was acquired in June by a San Francisco-based investment and asset management services company.

GWI is acquiring 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. GWI expects to fund the transaction and the simultaneous refinancing of its existing debt with approximately $2.0 billion of new debt and approximately $800 million of equity or equity-linked securities.

RailAmerica operates 45 railroads in 28 states and three Canadian provinces with approximately 7,500 miles of track. Among its affiliates are the Kiamichi Railroad; Chicago, Fort Wayne & Easter; Bauxite & Northern Railway; Dallas, Garland & Northeastern; Kyle Railroad; Missouri & Northern Arkansas Railroad; and Texas Northeastern Railroad.

SteelRiver Infrastructure Partners will acquire 100 percent of Patriot Rail’s stock through its dedicated infrastructure investment vehicle SteelRiver Infrastructure Fund North America LP.  The acquisition is subject to customary closing conditions, including the effectiveness of the control notice of exemption filed with the Surface Transportation Board.

Patriot is a leading operator of short line and regional freight railroads in the United States.  The Company operates the Louisiana & Northwest Railroad, Temple & Central Texas Railway, DeQueen & Eastern Railroad and Texas, Oklahoma & Eastern Railroad, as well as seven others that traverse 500 total rail miles across 13 states.

As part of the transaction, Patriot’s founder, Chairman, President and CEO, Gary O. Marino, will retire from these positions upon closing and provide consultancy services to Patriot’s management and its board.  Marino, who formed Patriot in 2006, was the co-founder and former Chairman, President and CEO of RailAmerica, Inc. (NYSE: RA).

John Fenton will become Patriot’s new CEO upon consummation of the sale.  Fenton is a career railroader and, most recently, has served as CEO of MetroLink, Southern California’s commuter rail public agency that manages a 512-mile system across six counties, including Los Angeles, and operates 162 daily trains.

 

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Katy Flavor

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.

Holding Steady

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.

Personal Switcher

The Kansas City West Bottoms Railroad (KCRR) debuted in early March, with no small impact on a parcel of track along the former Missouri Pacific Railroad near the Kansas-Missouri line. What’s turning heads, says KCRR president Rich Duncan, is that the tiny Class III short line is rewriting the railroad marketing narrative on first-mile, last-mile service with a new level of dedicated switching so its three customers can better connect to the Union Pacific.

Plus

Columnist Michelle Kempema writes that model railroaders and railfans can preserve their legacy for a good cause, railroads once ran special trains in enormous size and variety and autonomous battery-electric rail cars are being piloted on two Georgia short line railroads. Also, one modeler looking for something unique for his layout found just the thing in an old model railroad magazine - plans to scratch build a rock bunker. And more!