G&W finalizes Pentalver acquisition

The Darien, Conn.-based short line and regional railroad operator also released its first quarter 2017 financial results.    Short line and regional railway Genesee & Wyoming Inc.’s (G&W) United Kingdom subsidiary, GWI UK Acquisition Company Ltd., acquired all of the issued share capital of Pentalver Transport Ltd. from a subsidiary of APM Terminals, according to a joint press release issued by G&W and Pentalver.
   G&W’s planned 87 million euro (U.S. $95.6 million at current exchange rates) acquisition of Pentalver was first announced in December 2016.
   Southampton-based Pentalver operates off-dock container terminals at each of the UK’s four major seaports – Felixstowe, Southampton, London Gateway and Tilbury – as well as an inland terminal in Cannock, and a trucking haulage service, primarily between the seaports of Felixstowe, Southampton and Cannock. Pentalver also provides services related to container maintenance and repair, including refrigerated containers, and is one of the largest sellers of new and used containers in the UK.
   G&W expects the acquisition will enable it to enhance its UK services by providing rail and road transportation solutions, as well as offering storage operations at the ports and inland; and unlock efficiencies from shared services and enhanced asset utilization from Pentalver’s trucking fleet and Freightliner’s existing fleet.
   G&W subsidiary Freightliner is the largest provider of maritime container transportation by rail in the UK.
   Pentalver, which has about 600 employees, will continue to be run by its current Managing Director, Chris Lawrenson, and will operate as part of G&W’s UK/Europe region, led by Russell Mears. 
   In addition to its Pentalver acquisition, G&W reported its financial results for the first quarter of 2017, with net income attributable to G&W totaling $26.2 million, slipping 2.9 percent year-over-year.
   Operating revenues for the quarter reached $519.1 million, rising 7.6 percent year-over-year, G&W said.
   G&W’s North America segment reported operating revenues of $319.5 million for the quarter, ticking up 6.6 percent year-over-year, primarily driven by an increase in agricultural products and coal freight revenues, along with $7.4 million from new operations. The segment’s operating income for the quarter stood at $67.6 million, down 3.4 percent year-over-year.
   G&W’s eight North American regions serve 41 U.S. states and four Canadian provinces, and include 115 short line and regional freight railroads.
   Meanwhile, the company’s Australia segment recorded operating revenues of $73.9 million for the quarter, rising 42.7 percent year-over year, while operating income totaled $17.2 million, compared to an operating loss of $11.8 million for the first quarter of 2016. The Australian business performed better than expected due to the re-opening of a customer manganese mine in March, G&W President and CEO Jack Hellmann said.
   The company’s Australian region provides rail freight services in New South Wales, including in the Hunter Valley coal supply chain, the Northern Territory and South Australia.
   G&W’s UK/Europe segment recorded operating revenues of $125.7 million for the quarter, falling 4.1 percent year-over-year. The segment posted an operating loss of $7.3 million, compared to an operating loss of $1.2 million for the corresponding 2016 period. The company’s UK/Europe segment performed worse than expected due to a customer bankruptcy in Continental Europe and higher operating costs in its UK intermodal business, Hellmann explained.
   The company’s UK/Europe region, which is led by Freightliner, also has operations involving heavy-haul in Poland and Germany, intermodal services connecting Northern European seaports with key industrial regions in Germany, and regional rail services in the Netherlands and Belgium.