RailAmerica Completes Acquisition of Central Michigan Railway Company.
BOCA RATON, Fla.--(BUSINESS WIRE)--Jan. 26, 2004
RailAmerica, Inc. (NYSE:RRA) today announced that it has completed its acquisition of the Bay City, Michigan-based Central Michigan Railway Company (CMGN) for $25.3 million. The transaction was funded by utilizing cash on hand supplemented by funds from the Company's $100 million revolving credit facility.
The Central Michigan Railway operates 100 miles of rail line from Midland, Michigan, south to Durand, Michigan and generated revenues of approximately $11 million in 2003. CMGN provides rail freight service to the Saginaw, Michigan area, and interchanges traffic with Canadian National, CSXT, Lake State Railway, Tuscola & Saginaw Bay Railway, in addition to RailAmerica's Huron & Eastern Railway (HESR) and Saginaw Valley Railway (SGVY). Major shippers on the CMGN include Dow Chemical and Consumers Energy. Commodities moved on the CMGN include chemicals, coal, agricultural commodities, sugar beets, fertilizer and cement. CMGN also has cross-dock, warehouse and transload facilities.
Gary O. Marino, Chairman, President & CEO of RailAmerica said, "The CMGN represents our sixth Michigan railroad, where we now operate over 500 miles of rail lines and move over 60,000 freight carloads a year. The Central Michigan Railway has a history of strong operational performance and free cash flow (free cash flow is defined as operating income plus depreciation less capital expenditures and debt service). Due to the fact that its operations fit so well with RailAmerica's other Michigan railroads, we expect that we will derive significant cost savings and synergies from its integration into our organization. In fact, we anticipate that CMGN will be accretive to our earnings in 2004."
RailAmerica, Inc. (NYSE:RRA) is the world's largest short line and regional railroad operator with 49 railroads operating approximately 17,800 miles in the United States, Canada, Australia, Chile and Argentina, including track access arrangements. The Company is a member of the Russell 2000(R) Index. Its website may be found at http://www.railamerica.com.
Disclaimer Regarding Forward-Looking Statements: This press release contains forward-looking statements regarding future events and the performance of RailAmerica that involve risks and uncertainties that could cause actual results to differ materially including, but not limited to, fuel costs, foreign currency risks, failure to successfully integrate acquisitions, failure to service debt, failure to successfully market and sell non-operating/non-strategic properties and assets when scheduled or at all, failure to accomplish new marketing initiatives, economic and weather conditions, customer demand, increased competition in the relevant market, and others. In particular, forward-looking statements regarding earnings of the Company and entities to be acquired are subject to inherent economic, financial and operating uncertainties, including changes in economic and weather conditions, the ability to retain key customers and the impact of unforeseen costs and liabilities of such entities. Forward-looking statements speak only as of the date the statement was made. The Company assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. If the Company does update any forward-looking statement, no inference should be drawn that the Company will make additional updates with respect to that statement or any other forward-looking statements. We refer you to the documents that RailAmerica files from time to time with the Securities and Exchange Commission, such as the Form 10-K, Form 10-Q and Form 8-K, which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release.