Genesee & Wyoming Inc., a short line railroad holding company, agreed to acquire Worcester, Mass.-based Providence and Worcester Railroad Co. for $126 million. Company officials say the acquisition will enhance Genesee & Wyoming’s ability to serve customers and partners in the highly competitive New England market and will unlock significant cost savings and generate new commercial opportunities.
Darien, Conn.-based Genesee & Wyoming will fund the deal through a revolving credit facility. The company also expects to sell land in Rhode Island it developed through a $12 million investment.
Providence and Worcester operates in Rhode Island, Massachusetts, Connecticut and New York. The railroad company has 32 locomotives across 163 miles of owned track and more than 350 miles of track under access agreements. The company also provides rail service to three ports, including New Haven.
“The acquisition of P&W is an excellent strategic fit with G&W’s contiguous railroads, the New England Central and the Connecticut Southern,” said Genesee & Wyoming President and CEO John C. Hellmann, adding that he is excited to welcome Providence and Worcester’s 140 employees to the company.
In the first year of operation, Genesee & Wyoming expects Providence and Worcester to generate $35 million of revenue and require $3 million of annual capital expenditures.
The acquisition is expected to close in the fourth quarter of 2016.