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November 1, 2016

Genesee & Wyoming buys Providence and Worcester Railroad for $126m

Genesee & Wyoming (G&W) has completed the acquisition of US-based Providence and Worcester Railroad Company (P&W) in a $126m deal.

Genesee & Wyoming (G&W) has completed the acquisition of US-based Providence and Worcester Railroad Company (P&W) in a $126m deal.

Following closure of the acquisition, G&W transferred the stock of P&W to a voting trust with R Lawrence McCaffrey appointed as trustee.

The trust is set to remain in effect until the US Surface Transportation Board (STB) approves the company’s control of P&W.

Upon receiving approval, expected in the fourth quarter of this year, P&W would be managed as part of G&W’s north-east region.

"During the first year of operations, P&W is expected to generate around $35m in revenue."

P&W operates in Rhode Island, Massachusetts, Connecticut and New York and borders G&W’s New England Central Railroad (NECR) and Connecticut Southern Railroad (CSO).

G&W provides rail service to the Providence, Davisville and New Haven ports, in addition to a US customs bonded intermodal terminal in Worcester.

With the addition of P&W, G&W’s ability to serve customers and Class I partners in New England is expected to improve.

During the first year of operations, P&W is expected to generate around $35m in revenue and $12m in earnings before interest, taxes, depreciation, and amortisation (EBITDA), including realisation of $8m of immediate overhead, as well as operational cost savings.

G&W owns or leases 121 freight railroads worldwide and its eight North American regions serve 41 US states and four Canadian provinces.

The company’s Australia Region provides rail freight services in New South Wales, the Northern Territory and South Australia and operates the 1,400-mile Tarcoola-to-Darwin rail line.

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