Gulf & Atlantic Railways LLC (G&AR) on Aug. 29 reported entering a definitive agreement to acquire Pinsly Railroad Company’s (Pinsly) Massachusetts short line and warehousing business. The Surface Transportation Board (STB) on Sept. 7 issued a decision on the transaction.
The transaction includes the 18-mile Pioneer Valley Railroad (PVRR) and Pinsly’s Railroad Distribution Services, Inc. (RDS), a rail-served warehousing and distribution business.
PVRR, which Pinsly acquired in 1982, runs from Westfield to Holyoke, Mass. (see map above), with interline access to CSX and Pan Am Southern. Together with RDS, which Pinsly established in 1985, the short line serves more than 30 diversified customers. RDS operates two rail-served warehouses with 140,000 square feet of indoor storage and 3.5 acres of outdoor storage.
The addition of PVRR will expand Jacksonville, Fla.-based G&AR’s portfolio to six small roads. It already operates the 430-mile Florida, Gulf & Atlantic Railroad and the 228-mile Grenada Railroad, which received Honorable Mention in Railway Age’s 2021 Short Line and Regional Railroad Awards program. Additionally, earlier this year, G&AR acquired the 15-mile Camp Chase Railroad, 28-mile Chesapeake & Indiana Railroad, and 10-mile Vermilion Valley Railroad from Midwestern & Bluegrass Rail.
“PVRR and RDS are well-respected short line railroad and rail-served warehousing and distribution platforms, with an exceptional focus on safety, a fantastic team, and a diversified revenue base,” G&AR CEO Ryan Ratledge said. “The employees are talented, highly experienced professionals. We look forward to working with them to continue Pinsly’s track-record of safe, efficient rail and distribution service to customers and welcoming them to our growing team.”
“We are very pleased to have reached an agreement to transition our Massachusetts business to G&AR,” Pinsly CEO John Levine said. “Pinsly has a long-standing commitment to safety, service, business development and capital investment. We believe G&AR will be a great steward of our business and that Pinsly will add to the already outstanding and growing G&AR rail transportation infrastructure platform.”
Pinsly was advised by Northborne Partners.
The STB on Sept. 7 issued a decision, reporting in the Federal Register (download below) that the earliest this transaction may be consummated is Sept. 27, 2023. “Macquarie Infrastructure Partners V GP, LLC (MIP GP), a noncarrier, filed on behalf of MIP Infrastructure Partners V fund vehicle (MIP V), MIP V Rail, LLC (MIP Rail), and Gulf & Atlantic Railways, LLC (G&A), a verified notice of exemption under 49 CFR 1180.2(d)(2) to acquire control of Pioneer Valley Railroad Company, Inc. (PVRR), a Class III carrier currently controlled by Pinsly Railroad Company (Pinsly), a non-carrier,” STB said. “MIP GP states that: (1) PVRR does not connect with any of the railroads that would be in the same corporate family following the transaction; (2) the proposed transaction is not part of a series of anticipated transactions that would connect PVRR with any railroad in its corporate family; and (3) the transaction does not involve a Class I rail carrier. Therefore, the proposed transaction is exempt from the prior approval requirements of 49 U.S.C. 11323. See 49 CFR 1180.2(d)(2).”
According to STB, under 49 U.S.C. 10502(g), “the Board may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. However, 49 U.S.C. 11326(c) does not provide for labor protection for transactions under 49 U.S.C. 11324 and 11325 that involve only Class III rail carriers. Because this transaction involves Class III rail carriers only, the Board, under the statute, may not impose labor protective conditions for this transaction.
“If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions to stay must be filed no later than September 20, 2023 (at least seven days before the exemption becomes effective).”
In 2020, 3i-backed Regional Rail acquired Pinsly’s Florida operations. Pinsly divested its Arkansas division in 2015. For the history of the Pinsly Railroad Company, read ASLRRA President Chuck Baker’s February 2022 column in Railway Age: “Short Line Story Is One of Resiliency.”