Genesee & Wyoming Inc. (GWI) late Wednesday, Nov. 19, 2014 announced it "has signed an agreement with Pinsly Railroad Company of Westfield, Mass., to acquire certain subsidiaries that constitute Pinsly's Arkansas Division ('Pinsly Arkansas') for $40 million in cash, subject to adjustment for final working capital."
The acquisition is subject to customary closing conditions, including the expiration of the 30-day notice period required by the Surface Transportation Board for G&W to obtain authority to acquire the Pinsly Arkansas railroads. The transaction is expected to be completed in early January 2015, GWI said.
Jones Mills, Ark.-based Pinsly Arkansas includes four property groupings: the Arkansas Midland Railroad (AKMD), which is comprised of seven non-contiguous branch lines; the Prescott & Northwestern Railroad (PNW); and the Warren & Saline River Railroad (WSR); and the two Arkansas transload operations of Pinsly's Railroad Distribution Services subsidiary.
Operations are composed of 137 miles of owned and leased track, 70 employees, and 16 locomotives and serve the Hot Springs and Little Rock, Ark., areas, as well as the southwestern and southeastern portions of the state. Collectively, the railroads currently haul approximately 35,000 carloads per year and serve a diverse customer base in industries including aluminum, forest products, aggregates, energy and carton board, GWI said.
Pinsly Arkansas will be managed as part of GWI's Central Region, which includes six existing short line railroads in the state of Arkansas, under the leadership of Regional Senior Vice President Dewayne Swindall. The acquisition will be funded from GWI's revolving credit facility and is expected to be immediately accretive to GWI's earnings per share. In 2015, G&W estimates that Pinsly Arkansas will contribute approximately $5.4 million of EBITDA, including certain net cost savings.
Said GWI President and CEO Jack Hellmann, "Over the past 22 years, the Pinsly team has built an impressive cluster of short line railroads in Arkansas, with a clear focus on safety and customer service. Following the acquisition, G&W will own nine short line railroads in Arkansas, and we are excited about the opportunity to support and drive further economic growth in the state."