USA: Investment firm Ridgewood Infrastructure has acquired a controlling interest in Californian shortline Sierra Railroad Co and its Railpower subsidiary which developed and operates a hydrogen fuel cell powered locomotive.
Sierra’s operating subsidiaries include Sierra Northern Railway, which owns and operates the freight rail business and provides shunting, storage and transloading services across approximately 200 km of track. Its network is located near dairy and agricultural regions, major West Coast ports and centres of industrial demand, with access to Union Pacific and BNSF.
Simultaneously with Ridgewood’s investment announced on March 9, Sierra is acquiring Central Valley Ag Transport, an agricultural products transload facility owner and operator serving customers along the Sierra Northern network.
Ryan Stewart, partner at Ridgewood Infrastructure, said ‘Sierra is a high-quality shortline rail platform with strong fundamentals, a diversified customer base and a strategic footprint in some of California’s most important industrial and agricultural corridors. Our team brings deep experience owning and operating shortline and other railroad businesses across the USA, and we see meaningful opportunities to build on Sierra’s strong foundation’.
Sierra founder Mike Hart, who has led the group since 1995, said it ‘had reached a point where meaningful near-term investment was required to pursue identified opportunities.’
Sierra Northern CEO Kennan H Beard III said ‘Ridgewood’s experience operating rail and infrastructure businesses, combined with their investment approach, gives us the resources and support to accelerate execution across the platform. We are focused on growing volumes, expanding transload capacity, and continuing to serve our customers with the reliability and responsiveness they expect.’
Ridgewood was advised by King & Spalding and Truist Securities. Sierra was advised by Northborne Partners. Debt financing for the transaction was provided by Brookfield Infrastructure Credit.
