Genesee & Wyoming, Inc. (GWI) announced that it has completed the acquisition of Rotterdam Rail Feeding (RRF) for cash consideration of approximately US $21.4 million, with contingent consideration of up to US $2.4 million payable over the next three years.
Headquartered in the Port of Rotterdam in the Netherlands, RRF is an independent provider of short-haul rail and switching services. RRF’s principal business is “last mile” rail services within the Port of Rotterdam for long-haul railroads and industrial customers. In addition, RRF provides locomotives, railroad operating personnel and rail-related services throughout the Netherlands to track construction and maintenance companies as well as government-owned infrastructure operators.
RRF’s operations include 12 locomotives and 35 employees. Under GWI ownership, the business will continue to be led by its founder, Karel Poiesz, who will serve as managing director supported by his present management team. GWI expects the acquisition of RRF to be immediately accretive to its earnings per share.
“The acquisition of Rotterdam Rail Feeding is an important GWI investment for several reasons,” said John C. Hellmann, CEO of GWI. “First, we are extending our US port railroad franchise to serve the busiest container and bulk port in Europe. Second, we are executing a strategy that partners with the incumbent European railroads to provide the same customer-focused short-haul service that is the essence of our North American short line business model. Third, under the leadership of Karel Poiesz, we are adding an entrepreneurial management team that has built a strong business in the Netherlands and is seeking to expand its platform in Europe.”
“Joining GWI is a very important and positive development for RRF,” added Karel Poiesz. “It gives us access to capital and management support to expand throughout Europe and to provide our customers with the same high level of service in other ports and industrial areas. We look forward to enhancing our strong short-haul niche in the highly dynamic European rail market.”
DVB Capital Markets LLC acted as exclusive financial advisor to GWI.
GWI owns and operates short line and regional freight railroads and provides railcar switching services in the United States, Canada, Australia and the Netherlands and owns a minority interest in a railroad in Bolivia. Operations currently include 48 railroads organized in eight regions, with more than 5,700 miles of owned and leased track and approximately 3,000 additional miles under track access arrangements. GWI provides rail service at 16 ports in North America and Europe and performs contract coal loading and railcar switching for industrial customers. Corporate headquarters is in Greenwich, Conn.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Genesee & Wyoming’s business which are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s Annual Report or Form 10-K for the most recently ended fiscal year.