John D. Boyd | Aug 10, 2010 3:29PM EDT
Regional and short line railroad operator Patriot Rail reached an agreement in principle with paper manufacturer and forest products supplier Weyerhaeuser to buy six small rail lines the shipper has in Washington state and the South.
The companies did not disclose financial terms of their deal, which about doubles the number of rail properties held by Boca Raton, Fla.-based Patriot Rail. The company already owns six short lines operating over 331 rail miles in eight states and recently signed an agreement to lease and operate one other.
It said the pending acquisition from Weyerhaeuser should close in this year’s fourth quarter, subject to conditions including Patriot’s due diligence and regulatory approval.
The shipper’s railroads operate on about 160 miles in four states, with a current volume of 60,000 carloads annually and 120 employees. They mainly serve Weyerhaeuser and International Paper mills but also move finished products and serve some third-party customers. Each connects as well with a Class I railroad.
“They are very attractive railroads with appealing growth opportunities and are a key step in our company’s strategic growth process,” said Gary O. Marino, Patriot’s chairman, president & CEO.
Weyerhaeuser’s properties in the South are:
--DeQueen and Eastern Railroad Company, with two rail operating units -- DeQueen and Eastern, and Texas, Oklahoma & Eastern railroads -- that operate on a total of 87 route miles in southeast Oklahoma and southwest Arkansas;
--Golden Triangle Railroad, with 13.3 route miles in central Mississippi; and
--Mississippi & Skuna Valley Railroad, 21 route miles in Mississippi.
In Washington, the transaction would include:
--Columbia & Cowlitz Railway, which runs on 8.5 track miles in southwest Washington; and
--Weyerhaeuser Woods Railroad, with 30 route miles in that region connecting to Columbia & Cowlitz.
-- Contact John D. Boyd at jboyd@joc.com.
