Thursday, July 01, 2010

RailAmerica buys Atlas Railroad Construction

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RailAmerica announced Wednesday that it has agreed to buy acquire Atlas Railroad Construction Co. and related assets for $21.5 million in cash, plus closing adjustments for working capital estimated to be approximately $2.5 million.

Atlas was formed in 1954 as an engineering, construction, maintenance, and repair company operating mainly in the Midwest and Northeast. Its principal customers are public transit agencies, short line and regional railroads, and industrial railroads.

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RailAmerica President and CEO John Giles said: “We expect the next several years to see a dramatic increase in spending on railroad infrastructure driven by government stimulus programs and increased investments by North American railroads upgrading and improving their rail lines. Acquiring Atlas, a quality company with established relationships in the transit and freight rail sectors, positions Rail America to benefit directly from this spending.”

Giles said that during the next 12 months, Atlas will generate approximately $25 million in revenue, $3.5 million in operating income, and $2.1 million in depreciation and amortization. RailAmerica intends to use cash on hand to finance the purchase.