Genesee & Wyoming Inc. (G&W) announced that it has agreed to acquire Providence and Worcester Railroad Company (P&W) for $25.00 per share, or approximately $12m. Subject to satisfaction of customary closing conditions, the acquisition is expected to close following the receipt of P&W shareholder approval in the fourth quarter of 2016.
Headquartered in Worcester, Massachusetts, US, and operating in Rhode Island, Massachusetts, Connecticut and New York, P&W is contiguous with G&W’s New England Central Railroad (NECR) and Connecticut Southern Railroad (CSO). Rail service is provided by approximately 140 P&W employees with 32 locomotives across 163 miles of owned track and over approximately 350 miles under track access agreements.
P&W serves a mix of aggregates, auto, chemicals, metals and lumber customers in south eastern New England, handling approximately 43,000 carloads and intermodal units annually. In addition, P&W provides rail service to three ports (Providence, Davisville and New Haven) and to a US Customs bonded intermodal terminal in Worcester, Massachusetts, that receives inbound intermodal containers for distribution in New England. P&W also owns approximately 45 acres of undeveloped waterfront land in East Providence, Rhode Island, that was initially created as a deep water, rail-served port through a $12m investment. G&W expects to sell this undeveloped land.
Upon approval by the Surface Transportation Board (STB), P&W would be managed as part of G&W’s Northeast Region, led by Senior Vice President Dave Ebbrecht.
Jack Hellmann, President and Chief Executive Officer of G&W, commented, “The acquisition of P&W is an excellent strategic fit with G&W’s contiguous railroads, the New England Central and the Connecticut Southern. Following anticipated STB approval of the acquisition, our connectivity with the P&W enables us to realize substantial immediate cost savings, to share and optimize the utilization of equipment and other assets, and to unlock significant new customer opportunities across sister G&W railroads as well as connecting partners at two Canadian Class I Railroads, two US Class I Railroads and two regional railroads. Our acquisition of the P&W will ultimately enhance the efficiency and customer service of rail in New England.”
Source: Genesee & Wyoming
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