Independent freight railroad and rail services holding company RailUSA, LLC recently acquired a 430-mile rail line and related real estate from CSX Corporation (CSX). Financial terms of the deal were not disclosed.
The line—currently Florida Gulf & Atlantic Railroad (FGA)—operates from Baldwin, Fla., to Pensacola, Fla., passing through Tallahassee, Fla., with a connection to Attapulgus, Ga.
FGA transports approximately 30,000 carloads of freight annually, including commodities such as aggregates, cement, grain, chemicals, wind turbine components and other industrial products. FGA has 65 employees, 18 locomotives and is headquartered in Tallahassee, Fla.; it will continue to interchange with CSX.
FGA is the company’s second acquisition to date. In 2018, RailUSA acquired the Grenada railroad, a 206-mile rail line between Memphis, Tenn., and Canton, Miss.
“FGA’s geographic location makes it a highly desirable rail freight route for shippers in the Florida Panhandle, and offers prime railcar storage,” said RailUSA Chairman and CEO Gary O. Marino. “The line has many customers with plants located along the railroad, and we see a substantial opportunity to enhance the suite of services we offer them, as well as to attract new customers with concentrated local services.”
“This transaction continues our active acquisition program,” Marino added. “We are pleased with our progress to date and see strong potential opportunity in short line/regional railroad prospects in North America. Our company has strong financial backing that, combined with our own capital, provides the funding necessary to compete in the re-invigorated rail market. We plan to strategically invest in well-located railroads where significant value can be achieved through our organizational expertise.”
“There is growing demand for first- and last-mile freight services,” said Mark Sotir, Co-President of Equity Group Investments, RailUSA’s parent company. “We are attracted to the opportunity and staying power of short line railroads, which tend to have minimal disruption in economic downturns. Further, railcar storage provides a natural hedge for economic downturns.”