Genesee & Wyoming Inc. Enters Into Agreement to Acquire RailAmerica, for $27.50/Share

Genesee & Wyoming Inc. (GWI)

and RailAmerica, Inc.

jointly announced today 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, 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 (“BofAML”) and $800 million of committed equity financing from The Carlyle Group (“Carlyle”)

of which it has agreed to take a minimum of $350 million through a private placement of two-year mandatorily convertible preferred stock (“The Carlyle Convertible”) from Carlyle Partners V, a $13.7 billion U.S. buyout fund. The Carlyle Convertible has a coupon of 5% per annum for two years and is mandatorily convertible at a conversion price of $58.49. GWI has the option to fund up to an additional $450 million of The Carlyle Convertible on the same terms, subject to certain conditions. Alternatively, GWI may instead choose to fund the $450 million through the public issuance of equity or equity-linked securities.