RDC, GWI acquire new lines - Small-Road Update - Railroad Development Corp - Genesee and Wyoming Railroad Co - Brief Article

Railway Age, Feb, 2004

Railroad Development Corp. (RDC) has purchased Iowa Interstate Railroad (IAIS) and the assets of Heartland Rail Corp., and Genesee & Wyoming has agreed to pay Georgia-Pacific Corp. $85.6 million for three railroads that serve the manufacturer's facilities.

Partners since 1991, RDC--a privately held railway management and investment firm--and Heartland jointly owned IAIS, which operated on Heartland owned rail infrastructure between Bureau, Ill., and Council Bluffs, Iowa. As a result of the recent transaction, IAIS now owns Heartland's assets and has become a wholly owned subsidiary of RDC. Heartland was formed in 1984 to purchase the main line of the liquidated Rock Island Railroad. IAIS was established at the same time as a through route.

"The IAIS management team has done an outstanding job over the years in bringing the railroad from a startup operation to the solid company it is today," said RDC President Robert A. Pietrandrea. "Under RDC's ownership, this same team will continue to guide the railroad into the future."

G&W has acquired Georgia-Pacific's 15-mile Chattahoochee Industrial Railroad, which operates between Hilton and Saffold, Ga., connecting with Norfolk Southern and CSX Transportation; plus the Arkansas, Louisiana & Mississippi and the Fordyce & Princeton, which together operate 109 miles of contiguous track between Monroe, La., and Fordyce, Ark., connecting with Union Pacific and Kansas City Southern. The transaction includes a 20 year agreement for continued provision of services to the Georgia-Pacific plants.

For the 12 month period ended Sept. 30, 2003, the three Georgia-Pacific railroads had combined revenues of $18 million, of which the manufacturer accounted for approximately 90%.