DOW JONES NEWSWIRES RailAmerica Inc. (RA) said it would refinance $444 million in notes as it separately unveiled two investments: an acquisition and a stake in a railroad operator and waste transporter. Shares were up 4.3% at $15.86 after hours. The company, which operates smaller lines that haul shippers' and manufacturers' freight to major railways, said it launched a tender offer to purchase up to $444 million in aggregate principal amount of its outstanding 9.25% Senior Secured Notes due 2017. It is offering a consideration of $1,090 per $1,000 in principal amount, as well as an early-tender payment of $30 for every $1,000 of principal tendered by Feb. 14. The entire offer expires Feb. 29. Many companies have been refinancing debt lately to take advantage of low interest rates. Separately, RailAmerica said it agreed to pay $40 million to acquire Marquette Rail LLC, which owns 126 miles of rail track in Michigan. RailAmerica said Marquette interchanges with CSX Corp.'s (CSX) CSXT in Grand Rapids, Mich., and serves customers primarily in the chemical, pulp and paper and nonmetallics industries. Chief Executive John Giles said the company was pleased to add the property to its existing Michigan rail portfolio, adding it was an attractive opportunity to invest in a high quality franchise with a solid base of revenue from large, long-term customers and to grow through new developments on the line. He also said the railroad is close to RailAmerica's existing Michigan operations, which he expected would create efficiency. The company also said agreed to buy a 70% interest in the Wellsboro and Corning Railroad and Industrial Waste Group from privately held Myles Group for $18 million. RailAmerica said members of the Myles family would retain the remaining 30% interest in the companies and continue in senior leadership roles. Wellsboro and Corning operates 38 miles of track running from Wellsboro, Penn., to Corning, N.Y. Industrial Waste Group provides bulk transfer and storage for the energy and waste management industries. Giles said the assets' rail and transloading infrastructure at Wellsboro is uniquely because its located "in the heart of the northern Marcellus Shale," a burgeoning source of natural gas. "The acquisition allows RailAmerica to gain direct exposure to the enormous potential in the area and also leverage the expertise of Myles Group in opening similar transload facilities throughout the country," he said. In October, RailAmerica reported its third-quarter profit rose 14% as it improved operating revenue despite lower carloads. Its carload traffic has been falling frequently, often because of lower shipments of coal, its biggest commodity group. -By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com
