Iowa Pacific Holdings sells Arizona Eastern Railway Company to Genesee & Wyoming

Iowa Pacific Holdings, LLC has agreed to sell the Arizona Eastern Railway Co. to Genesee & Wyoming, Inc. in a $90.1 million cash transaction, subject to post-closing adjustments.

The Arizona Eastern was chartered in 1895 as the Gila Valley, Globe & Northern, and was constructed between Bowie and Miami, Ariz., about 133 route-miles. In the final two decades of the 20th Century, it changed hands several times. When IPH purchased it in 2004, “it was in severely deteriorated condition,” the company said. “IPH worked with all stakeholders to improve track and bridge conditions, and to develop additional freight business.” In 2008, the Arizona Eastern purchased an additional line between Clifton, Ariz., and Lordsburg, N.Mex., and connected through trackage rights over the Union Pacific to the original Bowie line.

“As a result of all these actions, since 2004, the Arizona Eastern’s freight traffic has grown dramatically, track speeds have increased, and there has been a significant reduction in derailments and a corresponding improvement in other safety metrics,” said IPH President Ed Ellis. “We are grateful to the hard working men and women of the Arizona Eastern for their diligence and creativity in assisting us with the turnaround of this important rail property. We also acknowledge the instrumental contributions of the major customer, Freeport McMoRan Copper and Gold, toward track and bridge rehabilitation. We are confident that G&W will take Arizona Eastern to the next level in service and condition of its physical plant, and are pleased to hand the reins to G&W.”

IPH is a privately-held operator of freight and passenger short line railroads in the U.S. and U.K., focusing its acquisitions on turnaround opportunities.