GWI to buy FreightLink, expands Australian presence
Written by William C. Vantuono, Editor-in-ChiefGreenwich, Conn.-based Genesee & Wyoming, Inc. (GWI) Tuesday said it had signed an agreement to acquire the assets of FreightLink for $227.2 million, plus assumption of debt worth about $1.4 million. GWI also expects to incur transaction-related expenses of $19.1 million, principally related to the payment of stamp duty (an Australian asset transfer tax).
The acquisition includes FreightLink Pty Ltd., Asia Pacific Transport Pty Ltd., and other corporate entities comprising FreightLink.
FreightLink is the owner and operator of the 1,400-mile Tarcoola to Darwin railroad, linking the Port of Darwin to the Australian interstate rail network in South Australia. The rail line is located on land leased to FreightLink by the AustralAsia Railway Corp. under a concession agreement that terminates in 2054.
FreightLink commenced operations in 2004, following the construction of the Alice Springs-to-Darwin portion of the rail line. FreightLink’s above-the-rail business currently handles approximately 60,000 carloads peryear using 23 locomotives and 430 railcars. Its business is divided into two main components: general freight and bulk minerals. FreightLink has been in receivership since November 2008.
GWI expects to close the acquisition and to commenceoperations in the fourth quarter of this year. FreightLink will be operated aspart of GWI’s Australia Region, Genesee & Wyoming Australia (GWA), which is based in Adelaide, South Australia, where FreightLink is also headquartered. GWA has managed FreightLink’s above-the-rail services since its inception in 2004, and currently provides the majority of its crews, manages its train operations, and also leases locomotives and wagons to FreightLink. GWI says that, given the operational overlap, it anticipates significant cost and capital efficiencies from combining FreightLink’s operations with GWA.
