RailAmerica Buys Rail Construction Firm

Short line RailAmerica will buy Atlas Railroad Construction for $24 million in a purchase aimed at giving the freight railroad a greater stake in projected investment in railroad infrastructure, the company announced.

Atlas provides engineering, construction and maintenance services mostly in the U.S. Midwest and Northeast for public transit agencies, short lines and regional railroads and industrial customers.

Although the company is forecasting only $25 million in revenue in the coming 12 months, Atlas’ services may see greater demand in coming years under efforts to upgrade the nation’s rail infrastructure and meet federal government goals of improved passenger rail services.

“We believe that RailAmerica will create new opportunities for Atlas to grow its business by expanding into regions where RailAmerica’s railroads already have a presence and by providing new services,” RailAmerica President and CEO John Giles said.

The deal also may be the first of several acquisitions for RailAmerica after the Jacksonville, Fla.-based company overhauled its finances and restructured debt to reduce annual interest payments by $6.8 million.

With the Atlas purchase, said Giles, “we have started to implement our acquisition strategy, a key corporate priority that complements our organic growth.”