3 Notch Railroad gets new owner
Published 12:03 am Wednesday, April 13, 2011
Andalusia’s Three Notch Railroad and two sister railways were acquired Monday by Rail-America Inc.
The Jacks-onville, Fla.,-based company anno-unced the agreement to acquire the assets of three short-line railroads – the Three Notch Railroad, the Wiregrass Central Railroad and the Conecuh Valley Railroad – for $12.7 million.
Corporate officials said the transaction is expected to close in the second quarter of 2011 and is subject to customary closing conditions including regulatory approvals.
The Three Notch Railroad includes 35 miles of track connecting Georgiana and Andalusia; the Wiregrass Central Railroad is a 20-mile railroad that runs between Waterford and Enterprise; and the Conecuh Valley Railroad is a 15-mile railroad linking Troy and Goshen. Each of the three lines interchanges with CSX Transportation and serves customers shipping primarily agricultural and manufactured products. Collectively, the three lines hauled approximately 6,000 carloads of freight during the fiscal year ending 2010.
“We are pleased to add these high-quality assets to our existing Alabama rail franchise,” said John Giles, RailAmerica president and CEO.
“Collectively, the railroads have a solid customer base as well as a number of opportunities for further growth. Additionally, the railroads are clustered in close proximity to our existing Alabama operations, which we expect to create significant operating efficiencies. We look forward to partnering with new and existing customers on the line and with the local community to continue growing business on these lines.”
During the next 12 months, RailAmerica anticipates these railroads will generate approximately $3.7 million in revenue, $1.2 million in operating income and $700,000 in depreciation and amortization. RailAmerica intends to use cash on hand to finance the purchase.
RailAmerica, Inc. owns and operates short line and regional freight railroads in North America, operating a portfolio of 40 individual railroads with approximately 7,300 miles of track in 27 U.S. states and three Canadian provinces.