RailAmerica to Go Private

Fortress Investment Group agrees to acquire the company for $16.35 a share in cash.
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Shares of

RailAmerica

(RRA)

were trading some 28% higher Wednesday on news the Boca Raton, Fla., railroad company would be taken private.

An affiliate of Fortress Investment Group will acquire RailAmerica in a deal valued around $1.1 billion, including the refinancing of the railroad's existing debt. The transaction is expected to close in the first quarter of 2007.

New York-based Fortress will pay RailAmerica shareholders $16.35 in cash for each common share they hold, a 32% premium to the stock's closing price Tuesday. Citigroup Global Markets and Morgan Stanley Senior Funding have committed to finance the deal.

RailAmerica is a short line and regional rail service provider with 42 railroads covering roughly 7,800 miles in the U.S. and Canada.

"This transaction offers outstanding value to our shareholders. We view the transaction with Fortress as the best alternative for RailAmerica's shareholders and are excited about partnering with Fortress going forward," said RailAmerica CEO Charles Swinburn.

Shares were up $3.42, at $15.80, in recent trading Wednesday.