The board of RailAmerica Inc., a short-line and regional rail service provider, has entered into a definitive merger agreement with Fortress Investment Group LLC.
Fortress has offered RailAmerica’s shareholders $16.35 in cash for each share of common stock, up 32 percent over the $12.38 closing price Tuesday on the New York Stock Exchange. The total value of the transaction, including the refinancing of RailAmerica’s existing debt, is about $1.1 billion.
“This transaction offers outstanding value to our shareholders. We view the transaction with Fortress as the best alternative for RailAmerica’s shareholders and are excited about partnering with Fortress going forward,” said Charles Swinburn, RailAmerica’s chief executive officer.
Fortress is a global alternative asset manager with about $26 billion in assets under management as of Sept. 30. The firm was founded in 1998, is headquartered in New York and has affiliates with offices in Dallas, San Diego, Toronto, London, Rome, Frankfurt and Sydney.
Wesley R. Edens, CEO of Fortress, said: “Fortress is excited to have the opportunity to invest in the North American rail industry. RailAmerica has assembled a well diversified portfolio of short-line railroads throughout North America and we look forward to working with the management team to grow the company.” RailAmerica operates 42 railroads over about 7,800 miles in the United States and Canada.
The transaction is expected to be completed in the first quarter 2007, subject to receipt of regulatory approvals, the approval of the holders of two-thirds of RailAmerica’s outstanding common stock, and other customary conditions.
RailAmerica agrees to Fortress’ $1.1 billion takeover offer
RailAmerica agrees to Fortress’ $1.1 billion takeover offer
