RailAmerica Pops 10% on Acquisition

Shares of RailAmerica

were seeing increased strength during Monday's trading session after the company announced it would be acquired by Genesee & Wyoming

. Genesee & Wyoming and RailAmerica jointly announced that they have entered into an agreement under which GWI will acquire RailAmerica for an all cash purchase price of $27.50 per share. GWI's acquisition of RailAmerica will combine the two largest short line and regional rail operators in North America, strengthening GWI's ability to serve its industrial customers and Class I railroad partners. In addition, according to the companies, the combination should yield significant synergies and provide strong leverage to the eventual recovery of the U.S. economy, while creating a powerful platform for future industrial development along railroads in the 37 U.S. states in which GWI will do business. GWI expects to fund the transaction and the simultaneous refinancing of its existing debt with approximately $2.0 billion of new debt and approximately $800 million of equity or equity-linked securities. GWI has received $2.3 billion of committed debt financing from BofA Merrill Lynch and $800 million of committed equity financing from The Carlyle Group

. Monday, shares of RailAmerica were trading up 10 percent, at about $27.30 per share.