USA: Railway Based Industrial Waste Carrier

[John Ashworth]

Railway Based Industrial Waste Carrier Acquired in U.S.

09 February 2012
Waste Management World

Rail freight operator, RailAmerica has signed an agreement to acquire a majority interest in the Wellsboro and Corning Railroad and Industrial Waste Group.

The company said that it is to acquire a 70% interest in the Wellsboro and Corning Railroad (WCOR) and Industrial Waste Group (IWG) from Myles Group for $18 million.

IWG performs transload, storage, and other value-added services for customers in the energy and waste management industries.

According to RailAmerica, IWG operates four transloading facilities located in Wellsboro, Pennsylvania; Corning, New York; Toledo Ohio; and Amelia, Virgina.

RailAmerica said that it expects IWG to continue to grow by developing transload operations in new markets and extending its services throughout RailAmerica's network.

The WCOR operates 38 miles of track running from Wellsboro, PA to Corning, NY handling a variety of industrial products primarily used in the natural resources industry.

Over the next 12 months of operations, WCOR and IWG combined are expected to generate approximately $17 million in revenue, $3.5 million in operating income (excluding closing costs) and $1.3 million in depreciation and amortization.

RailAmerica said that it intends to finance the purchase using cash on hand and its revolving credit facility. The financial results of the WCOR and IWG will be consolidated into RailAmerica's financials, and RailAmerica's net income will be reduced by the thirty-percent minority interest.

President and CEO of RailAmerica, John Giles commented: "The rail and transloading infrastructure at Wellsboro is uniquely located in the heart of the northern Marcellus Shale and represents a key asset in the transportation of both inbound and outbound products for major exploration and production companies."

Members of the Myles family will retain the remaining 30% interest in the companies and continue in senior leadership roles. The acquisition is subject to customary closing conditions and is expected to be completed early in the second quarter of 2012.