CHARLOTTE (dpa-AFX) - Genesee & Wyoming Inc. (GWR), or GWI, and RailAmerica, Inc. (RA) jointly announced that they have entered into an agreement under which GWI will acquire RailAmerica for an all cash purchase price of $27.50 per share. GWI expects to fund the transaction and the simultaneous refinancing of its existing debt with around $2 billion of new debt and approximately $800 million of equity or equity-linked securities. GWI obtained $800 million of committed equity financing from The Carlyle Group (CG) of which it has agreed to take a minimum of $350 million through a private placement of two-year mandatorily convertible preferred stock from Carlyle Partners V, a $13.7 billion U.S. buyout fund.
In addition, GWI has received $2.3 billion of committed debt financing from BofA Merrill Lynch, the corporate and investment banking division of Bank of America Corp. (BAC).
According to GWI, its acquisition of RailAmerica will combine the two largest short line and regional rail operators in North America, strengthening GWI's ability to serve its industrial customers and Class I railroad partners. Besides, the combination should yield significant synergies and provide strong leverage to the eventual recovery of the U.S. economy, while creating a powerful platform for future industrial development along railroads in the 37 U.S. states in which GWI will do business.
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