RailAmerica to acquire Marquette Rail in Michigan for $40 million

JACKSONVILLE, FL, Feb. 1, 2012 (PRNewswire) - RailAmerica today announced that it has signed an agreement to acquire Marquette Rail LLC for $40 million subject to final adjustments for working capital. The acquisition is subject to customary closing conditions and Surface Transportation Board approval.

Headquartered in Ludington, MI, Marquette operates 126 miles of track running from Grand Rapids, MI to Ludington and Manistee, MI. Marquette interchanges with CSXT in Grand Rapids and serves customers primarily in the chemical, pulp & paper, and non-metallics industries. Marquette hauled approximately fifteen-thousand carloads of freight during the fiscal year ended 2011.

RailAmerica President and CEO John Giles said, "We are extremely pleased to add this property to our existing Michigan rail portfolio. The acquisition of Marquette represents an attractive opportunity to invest in a high quality franchise with a solid base of revenue from large, long-term customers and drive substantial near-term growth from new developments on the line. In addition, the railroad is in close proximity to RailAmerica's existing Michigan operations, which we expect will create significant operating efficiencies."

For the next twelve months, RailAmerica anticipates Marquette will generate approximately $13 million in revenue, $4 million in operating income (excluding closing costs) and $2 million in depreciation and amortization. The company intends to finance the purchase using cash on hand and its revolving credit facility.

RailAmerica, Inc. owns and operates short-line and regional freight railroads in North America, operating a portfolio of 43 individual railroads with approximately 7,400 miles of track in 27 U.S. states and three Canadian provinces.