Genesee & Wyoming Inc. (the "Company") (NYSE: GWR) announced today that it priced its previously announced offering of 3,500,000 shares of Class A Common Stock at $64.75 per share, including 233,996 shares of Class A Common Stock being offered by a selling stockholder who is the Chairman of the Company’s Board of Directors, resulting in aggregate gross proceeds to the Company of $211.5 million. The Company also priced its previously announced offering of 2,000,000 of 5.00% tangible equity units, each with a stated amount of $100, resulting in aggregate gross proceeds of $200.0 million. The Company has granted the underwriters of the Class A Common Stock offering a 30-day option to purchase up to an additional 525,000 shares of Class A Common Stock and the underwriters of the tangible equity units offering an option to purchase, within a 13-day period beginning on, and including, the initial issuance date for the tangible equity units, up to an additional 300,000 tangible equity units. The completion of the Class A Common Stock offering is not contingent on the completion of the tangible equity units offering and the completion of the tangible equity units offering is not contingent on the completion of the Class A Common Stock offering. Each offering is expected to close on September 19, 2012, subject to customary closing conditions. Each tangible equity unit will consist of a prepaid stock purchase contract and an amortizing note. Unless earlier settled or redeemed, each stock purchase contract will automatically settle on October 1, 2015 (subject to postponement in limited circumstances) for between 1.2355 and 1.5444 shares of Class A Common Stock (subject to adjustment as described in the final prospectus supplement relating to the tangible equity units offering). The amortizing notes will pay equal quarterly cash installments of $1.25 per note (except the first such installment, which will be $1.4167 per note), which will constitute a payment of interest and a partial repayment of principal, and which in the aggregate will be equivalent to a 5.00% cash payment per year with respect to each $100 stated amount of each tangible equity unit. The amortizing notes will have a final installment payment date of October 1, 2015 and will be unsecured senior obligations of the Company.
The Company expects the net proceeds of the Class A Common Stock offering to be $200.9 million (or $233.4 million if the underwriters exercise their option to purchase additional shares in full), after deducting underwriting discounts and commissions and estimated offering expenses. The Company expects the net proceeds of the tangible equity units offering to be $192.5 million (or $221.6 million if the underwriters exercise their option to purchase additional tangible equity units in full), after deducting underwriting discounts and commissions and estimated offering expenses.The Company intends to use the net proceeds of the offerings to partially fund the acquisition of RailAmerica, Inc. (“RailAmerica”). If the acquisition of RailAmerica is not consummated, the Company intends to use the net proceeds from these offerings for general corporate purposes, including strategic investments and acquisitions. If the tangible equity units offering is completed but the acquisition of RailAmerica is not consummated, the Company may redeem all, but not less than all, of the outstanding purchase contracts by issuing a redemption notice during the five business day period following April 30, 2013. The Company will pay a redemption price at that time in cash or in shares of Class A Common Stock in accordance with the terms of the purchase contracts. If the Company elects to redeem the purchase contracts, it may be required by the holders thereof to repurchase the amortizing notes at the repurchase price set forth in the amortizing notes. The Company's Class A Common Stock is listed on the New York Stock Exchange under the symbol GWR and the Company will apply to list the tangible equity units on the New York Stock Exchange, subject to satisfaction of its minimum listing standards. BofA Merrill Lynch, Citigroup and J.P. Morgan are serving as the joint book-running managers for the Class A Common Stock offering and BB&T Capital Markets, RBC Capital Markets, Wells Fargo Securities, Santander, Raymond James, Stifel Nicolaus Weisel, Dahlman Rose & Company, LLC, Stephens Inc. and Wolfe Trahan Securities are serving as co-managers. BofA Merrill Lynch, Citigroup and J.P. Morgan are serving as the joint book-running managers for the tangible equity units offering and BB&T Capital Markets, RBC Capital Markets, Wells Fargo Securities, Santander, Raymond James, Stifel Nicolaus Weisel, Dahlman Rose & Company, LLC, Stephens Inc. and Wolfe Trahan Securities are serving as co-managers.
The shares of Class A Common Stock and the tangible equity units, including the component stock purchase contracts and amortizing note, will be issued pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission (the “SEC”) on Form S-3 and available on the SEC's website, http://www.sec.gov. A final prospectus supplement related to the offering of Class A Common Stock and a final prospectus supplement related to the offering of tangible equity units will be filed with the SEC and will be available on the SEC's website, http://www.sec.gov.Copies of the preliminary prospectus supplement and the accompanying base prospectus related to the Class A Common Stock and the preliminary prospectus supplement and the accompanying base prospectus related to the tangible equity units may be obtained from BofA Merrill Lynch at 222 Broadway, 7 th Floor, New York, New York 10038, Attn: Prospectus Department, email: email@example.com; Citigroup, Attn: Prospectus Department, Brooklyn Army Terminal, 140 58 th Street, 8 th Floor, Brooklyn, New York 11220, firstname.lastname@example.org or by calling 1-800-831-9146; and J.P. Morgan, Attn: Broadridge Financial Solutions at 1155 Long Island Avenue, Edgewood, New York 11717, or by calling 1-866-803-9204. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Company owns and operates short line and regional freight railroads and provides railcar switching services in the United States, Australia, Canada, the Netherlands and Belgium. In addition, we operate the Tarcoola to Darwin rail line, which links the Port of Darwin with the Australian interstate rail network in South Australia. Operations currently include 66 railroads organized in 10 regions, with more than 7,600 miles of owned and leased track and approximately 1,400 additional miles under track access arrangements. We provide rail service at 23 ports in North America, Australia and Europe and perform contract coal loading and railcar switching for industrial customers.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the Company’s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to forecast. Actual results may differ materially from those expressed or forecast in these forward-looking statements. Examples of factors that could cause actual results to vary from those expressed in forward-looking statements include all statements that are not historical in nature, including statements regarding: (1) the industry and markets, including their outlook, in which we operate and our competitive position; (2) the impact of political, social or economic conditions (including commodity demand associated with the industrialization of developing economies) on our results and our susceptibility to downturns in the general economy; (3) our operations, competitive position, growth strategy and prospects; (4) our ability to complete, integrate and benefit from acquisitions, including our pending acquisition of RailAmerica, Inc., investments, joint ventures and strategic alliances, and the challenges associated with managing rapid growth and operating a global business with decentralized management and operations; (5) our indebtedness and our ability to fulfill our obligations under such indebtedness; (6) the imposition of operational restrictions as a result of covenants in our debt agreements; (7) our susceptibility to severe weather conditions, climate change and other natural occurrences, which could result in shutdowns, derailments, other substantial disruptions of operations or impacts on our customers; (8) governmental policies, legislative and regulatory developments affecting our railroad operations or the operations of our customers, including the passage of new legislation, rulings by the Surface Transportation Board and the Federal Railroad Administration, as well as the actions of the Railroad Retirement Board in the United States and the actions of the governmental entities in the foreign jurisdictions where we operate; (9) our relationships with Class I railroads and other connecting carriers for our operations; (10) our ability to obtain railcars and locomotives from other providers on which we are currently dependent; (11) competition from numerous sources, including those relating to geography, substitute products, other modes of transportation and other rail operators; (12) changes in foreign exchange policy or rates; (13) strikes, work stoppages or unionization efforts by our employees or in the rail network; (14) our ability to attract, retain and develop a sufficient number of skilled employees, including senior leadership in the various geographies in which we operate; (15) our obligation as a common carrier to transport hazardous materials by rail; (16) the occurrence of losses or other liabilities which are not covered by insurance or which exceed our insurance limits, or which cause our self-insured retentions or insurance premiums to rise; (17) rising fuel costs or constraints in fuel supply; (18) customer retention and contract continuation; (19) our exposure to the credit risk of customers and counterparties; (20) our ability to manage our growth effectively; (21) our funding needs and financing sources, including our ability to obtain government funding for capital projects; (22) acts of terrorism and anti-terrorism measures; (23) the effects of market and regulatory responses to environmental, health and safety law changes, as well as the effects of violations of, or liabilities under, new or existing environmental, health and safety laws, regulations and requirements; (24) our susceptibility to various legal claims and lawsuits; and (25) our susceptibility to risks associated with doing business in foreign countries.