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Genesee & Wyoming to draw on revolver for CAGY purchase
By Sara Rosenberg
New York, April 29 - Genesee & Wyoming Inc. plans to use borrowings under its senior revolving credit facility to fund the about $78.4 million acquisition of CAGY Industries Inc., according to a news release.
The final purchase price will be adjusted for working capital at the time of closing. In addition, the company has agreed to pay contingent consideration of up to $18.6 million upon satisfaction of certain conditions over the next two years.
As of March 31, pro forma for the acquisition, the company's consolidated net debt to capitalization is expected to be about 43%, including contingent consideration with net debt to pro forma EBITDA of about 2.4 times.
The acquisition is expected to close on June 1, subject to customary conditions, including the expiration of the 30-day notice period required by the Surface Transportation Board.
Genesee & Wyoming is a Greenwich, Conn., owner and operator of short line and regional freight railroads. CAGY is a Columbus, Miss., parent company of three short-line railroads.
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