From Press, Staff Reports

Genesee & Wyoming Inc. of Greenwich, Conn., has signed an agreement to acquire CAGY Industries Inc. for approximately $78.4 million in cash.

The final purchase price will be adjusted for working capital at the time of closing, according to the April 29 announcement.

In addition, GWI has agreed to pay contingent considerations of up to $18.6 million upon satisfaction of certain conditions over the next two years. GWI expects the transaction to close and commence operations June 1.

CAGY is the parent company of three short-line railroads, including Columbus & Greenville Railway in Mississippi.

The C&G line is inoperable between West Point and Greenwood. Efforts are under way to form a public rail authority that would allow the railroad to become eligible for federal financing to rebuild that stretch of line to modern standards.

Cynthia Wilson, executive director of the Webster County Development Council, and Mississippi State University consultants have been asking supervisors in counties along the line to adopt resolutions to join in creation of the rail authority.

Regarding the sale's impact on that project, Wilson said, "It will only help us be able to achieve our goals, which are to reopen the 92 miles that are currently out of service and get the rail bridge back on the planned I-69 bridge over the Mississippi.

"We currently have Webster, Clay, Oktibbeha and Sunflower counties as members of the North Central Mississippi Regional Railroad Authority and public hearings have been scheduled for two other counties. We are waiting to see if Leflore County is going to adopt the resolution Monday of next week and we don't know what Carroll County is going to do yet."

CAGY's railroads employ 48 workers, own and operate a fleet of 22 locomotives, own and lease more than 280 miles of track and are expected to haul more than 26,000 carloads of freight traffic over the next 12 months.

GWI CEO John C. Hellman said, "Over the past three decades, CAGY has built an impressive short-line railroad organization. With the support of local communities, customers and employees, CAGY has succeeded in revitalizing its rail infrastructure and substantially increasing rail traffic. We are pleased that Roger Bell, who has been the architect of CAGY's success as president and CEO, will continue to lead the rail operations as part of the GWI family of railroads."

GWI owns and operates short-line and regional freight railroads in the U.S., Canada, Australia and the Netherlands, and owns a majority interest in a Bolivian railroad. It currently operates 48 railroads with more than 5,700 miles of owned and leased track and approximately 3,000 additional miles under track access arrangements.