Genesee & Wyoming To Buy Providence And Worcester Railroad For About $126 Mln

(RTTNews) - Genesee & Wyoming Inc. (GWR) or G&W announced that it has agreed to acquire Providence and Worcester Railroad Company (PWX) for $25.00 per share, or approximately $126 million.

Subject to satisfaction of customary closing conditions, the acquisition is expected to close following the receipt of P&W shareholder approval in the fourth quarter of 2016.

In the first year of operation, G&W anticipates P&W will generate approximately $35 million of revenue and $12 million of EBITDA, including realization of $8 million of immediate overhead and operational cost savings. In the medium term, G&W anticipates additional operational efficiencies and commercial opportunities will generate a further $5 million of EBITDA that will be realized over the following two to three years.

G&W expects P&W will require approximately $3 million of annual capital expenditures and have depreciation and amortization expense of approximately $3 million. G&W expects annual diluted EPS accretion from the acquisition of approximately 2%, subject to finalization of acquisition accounting under U.S. GAAP.

G&W expects to fund the approximately $126 million acquisition through its revolving credit facility under which it had available capacity of $542 million as of June 30, 2016.