USA: Freight railway group RailUSA has announced its second acquisition, forming the Florida Gulf & Atlantic Railroad with the purchase of a 690 km line from CSX Corp. Terms were not disclosed.
The FGA runs east–west across northern Florida from Baldwin near Jacksonville to Tallahassee and Pensacola, with a connection to Attapulgus in Georgia. It has 65 employees and 18 locomotives, and currently moves 30 000 wagonloads per year including aggregates, cement, grain, chemicals, wind turbine components and industrial products.
‘FGA’s geographic location makes it a highly desirable rail freight route for shippers in the Florida Panhandle, and offers prime railcar storage’, said RailUSA Chairman & CEO Gary O Marino on June 3. ‘The line has many customers with plants located along the railroad, and we see a substantial opportunity to enhance the suite of services we offer them, as well as to attract new customers with concentrated local services.’
RailUSA is owned by the Equity Group Investments private investment firm of Sam Zell, the International Rail Partners group of experienced railway managers, and other EGI co-investors. It is ‘actively acquiring’ short line and regional railways, with the FGA being its second line following the 340 km Grenada Railroad between Memphis, Tennessee, and Canton, Mississippi which it acquired last year.
‘Our company has strong financial backing that, combined with our own capital, provides the funding necessary to compete in the re-invigorated rail market’, said Marino. ‘We plan to strategically invest in well-located railroads where significant value can be achieved through our organisational expertise.’
EGI Co-President Mark Sotir said the investment firm was ‘attracted to the opportunity and staying power of short line railroads, which tend to have minimal disruption in economic downturns’.