RailAmerica executes agreement to acquire Dakota Rail.

BOCA RATON, Fla.--(BUSINESS WIRE)--July 13, 1995--RailAmerica Inc. (NASDAQ:RAIL) announced today that it has entered into an agreement to purchase all of the issued and outstanding stock of Prairie Holding Corp. which owns Dakota Rail Inc., a short line railroad headquartered in Hutchinson, Minn.

Dakota Rail operates 44 miles of track between Hutchinson and Wayzata (Minneapolis), Minn. The purchase price will be $1,400,000 in cash. The transaction is subject to completion of due diligence, regulatory approvals and other customary conditions, and closing of the acquisition is expected to occur on or about Aug. 31, 1995. The railroad carries plastics, lumber, denatured alcohol, scrap iron, grain and other agricultural commodities. The railroad also operates a significant railcar repair facility. Estimated revenues of the railroad are $1,000,000 to $1,250,000 per year. This acquisition will be RailAmerica's fifth short line railroad operation.

In commenting on the acquisition, Gary O. Marino, chairman and CEO of RailAmerica, said, "The purchase of Dakota Rail is a continuation of our stated business strategy of acquiring additional short line or regional freight railroads. This railroad diversifies the geographic areas served by RailAmerica railroads and helps to mitigate the seasonal and cyclical freight shipments by our existing customers and generates the shipment of other commodity types. We continue to review and negotiate for other rail line acquisitions and expect to announce several additional acquisitions during the second half of 1995."

RailAmerica Inc. is a diversified, publicly held transportation company with two business groupings - (1) transportation and distribution, and (2) manufacturing and financial services. The company owns and develops short line and regional freight railroads and currently operates four railroads with approximately 300 miles of rail lines in Michigan, Tennessee, Pennsylvania and Delaware. The company also owns a distribution services company, an intermodal services company, and a transportation equipment finance company. Through its subsidiary, Kalyn/Siebert Inc., the company manufactures a broad line of heavy duty specialty truck trailers marketed throughout the U.S, Mexico and Canada. The company recently completed the acquisition of Steel City Carriers Inc., a regional motor carrier based in Sault Ste. Marie, Ontario, Canada.

CONTACT: RailAmerica

Gary O. Marino, 407/994-6015

or

KCSA Public & Investor Relations 

Joseph A. Mansi/Herbert L. Corbin

212/682-6300 ext. 205/200