This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

The Carlyle Group To Invest In Genesee & Wyoming, Enabling Genesee’s Acquisition Of RailAmerica, Inc. For $2 Billion

Global alternative asset manager The Carlyle Group (NASDAQ: CG) announced today that it has agreed to invest up to $800 million in Genesee & Wyoming Inc. (GWI) (NYSE: GWR), which will enable Genesee & Wyoming to acquire RailAmerica, Inc. (NYSE: RA) for an all cash purchase price of $2 billion ($27.50 per share). Equity for the investment will come from Carlyle Partners V, a $13.7 billion U.S. buyout fund. Financing will be provided by Bank of America Merrill Lynch. The transaction is subject to customary closing conditions and regulatory approval and is expected to close in the fourth quarter of 2012.

Greg Ledford, Carlyle Managing Director and Head of the Transportation and Industrial team, said, “We believe this partnership offers strategic benefits and will create significant operational synergies. Carlyle’s industry expertise and global network will help surface acquisition and growth opportunities that will strengthen GWI’s long-term profitability. We look forward to partnering with Jack and his team as we capitalize on these high quality assets and the favorable dynamics of the domestic and global rail industry.”

Jack Hellmann, President and CEO of GWI, said, “This strategic acquisition will create significant shareholder value. Based on our new partnership with Carlyle and the number of additional rail opportunities that we see worldwide, we remain confident in our ability to execute our acquisition and investment strategy to sustain our long term EPS growth. Expanding our footprint provides us with strong leverage to the eventual recovery of the U.S. economy and creates a powerful platform for future domestic and global industrial development. The combination strengthens our ability to offer local, flexible, responsive operations with outstanding customer service.”

Overview of Combined OperationsGWI’s acquisition of RailAmerica will combine the two largest short line and regional rail operators in North America. The transaction is transformational for GWI’s North American operations, as GWI will now operate 108 railroads over more than 12,000 track miles. The transaction increases GWI’s total revenues by nearly two-thirds to approximately $1.4 billion (2011) and doubles North American revenue to approximately $1.1 billion (2011). Following the transaction, GWI will have 111 railroads (108 in North America), 15,120 miles of track (12,300 in North America), 1.9 million carloads (1.7 million in North America), 1,000 locomotives (900 in North America) and 4,300 employees (3,900 in North America).

The transaction significantly increases GWI’s customer and commodity diversification. In 2011, no single customer would have represented more than 3% of pro forma revenues, and no single commodity group would have represented more than 13% of pro forma freight revenues. On a geographic basis, GWI’s footprint of railroads will grow from 24 U.S. States to 37 U.S. States, while the United States overall will represent approximately 70% of GWI’s pro forma revenue, with Australia at 20%, Canada at 10% and Europe at less than 1%. Following the transaction, GWI expects to originate or terminate more than 4% of carload traffic in the United States, with volumes well balanced across all of the Class I carriers.

Stock quotes in this article: CG, GWR 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,262.56 +89.32 0.55%
S&P 500 1,842.98 +12.37 0.68%
NASDAQ 4,034.1610 +11.4670 0.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs