Fortress Investment Group LLC to Acquire RailAmerica, Inc. for $16.35 Per Share in an All-Cash Transaction
November 15 2006 - 8:45AM
Business Wire
RailAmerica, Inc. (�RailAmerica�) (NYSE:RRA) announced that it has
entered into a definitive merger agreement with an affiliate of
Fortress Investment Group LLC (�Fortress�) under which
RailAmerica�s shareholders will receive $16.35 in cash for each
share of RailAmerica common stock they hold, a 32% premium to the
NYSE closing price of $12.38 on November 14, 2006 and a 49% premium
to the average closing price over the last 60 trading days. The
total value of the transaction, including the refinancing of
RailAmerica�s existing debt, is approximately $1.1 billion. �This
transaction offers outstanding value to our shareholders. We view
the transaction with Fortress as the best alternative for
RailAmerica�s shareholders and are excited about partnering with
Fortress going forward,� said Charles Swinburn, Chief Executive
Officer of RailAmerica. Wesley R. Edens, CEO of Fortress stated,
�Fortress is excited to have the opportunity to invest in the North
American rail industry. RailAmerica has assembled a well
diversified portfolio of shortline railroads throughout North
America and we look forward to working with the management team to
grow the company.� Morgan Stanley & Co. Incorporated acted as
financial advisor to RailAmerica in connection with the
transaction. Houlihan Lokey Howard & Zukin Financial Advisors,
Inc. provided an opinion to the Board of Directors of RailAmerica
that the merger consideration is fair to RailAmerica�s
shareholders. Holland & Knight LLP acted as legal advisor to
RailAmerica and Skadden, Arps, Slate, Meagher & Flom LLP acted
as legal advisor to Fortress. The merger agreement was unanimously
approved by RailAmerica's full Board of Directors. The closing of
the transaction is subject to receipt of regulatory approvals, the
approval of the holders of two-thirds of RailAmerica's outstanding
common stock, and other customary conditions. The parties presently
anticipate consummating the transaction during the first quarter of
2007. Although the offer is not conditioned upon obtaining
financing, debt financing for the transaction has been fully
committed by Citigroup Global Markets Inc. and Morgan Stanley
Senior Funding, Inc. subject to customary closing conditions
including completion of definitive documentation. Upon completion
of the transaction, RailAmerica will become a privately held
company, and its common stock will no longer be publicly traded.
RailAmerica, Inc. (NYSE:RRA) is a leading short line and regional
rail service provider with 42 railroads operating approximately
7,800 miles in the United States and Canada. The Company is a
member of the Russell 2000 Index. Its website may be found at
http://www.railamerica.com. Fortress Investment Group LLC is a
global alternative asset manager with approximately $26 billion in
assets under management as of September 30, 2006. The firm was
founded in 1998, is headquartered in New York and has affiliates
with offices in Dallas, San Diego, Toronto, London, Rome, Frankfurt
and Sydney. Important Additional Information Will be Filed with the
SEC RailAmerica plans to file with the SEC a proxy statement in
connection with the transaction. RailAmerica shareholders are urged
to read the proxy statement and other relevant materials when they
become available because they will contain important information
about RailAmerica, Fortress and the proposed transaction. The final
proxy statement will be mailed to shareholders of RailAmerica. In
addition to the documents described above, RailAmerica files
annual, quarterly and current reports, proxy statements and other
information with the SEC. The proxy statement and other relevant
materials (when they become available), and any other documents
filed with the SEC by RailAmerica, are available without charge at
the SEC's website at http://www.sec.gov, or at RailAmerica 's
website at http://www.railamerica.com. Participants in Solicitation
Neither RailAmerica nor Fortress is currently engaged in a
solicitation of proxies from the stockholders of RailAmerica in
connection with the proposed transaction. If a proxy solicitation
commences, RailAmerica, Fortress and their respective directors and
officers and other members of management may be deemed to be
participants in such solicitation. Information regarding
RailAmerica 's directors and executive officers is available in its
Annual Report on Form 10-K for the year ended December 31, 2005,
and the proxy statement, dated April 17, 2006, for its 2006 annual
meeting of stockholders, which are filed with the SEC. Additional
information regarding the interests of such potential participants
will be included in the proxy statement and other relevant
documents to be filed with the SEC in connection with the proposed
transaction. DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS: This
press release contains forward-looking statements regarding future
events that involve risks and uncertainties that could cause actual
results to differ materially, including, but not necessarily
limited to, statements relating to RailAmerica's ability to close
the transaction, satisfaction of closing conditions and the timing
of the closing of the transaction. Forward-looking statements speak
only as of the date the statement was made. RailAmerica assumes no
obligation to update forward-looking information to reflect actual
results, changes in assumptions or changes in other factors
affecting forward-looking information. If RailAmerica does update
any forward-looking statement, no inference should be drawn that
RailAmerica will make additional updates with respect to that
statement or any other forward-looking statements. Please refer to
the reports that RailAmerica files from time to time with the
Securities and Exchange Commission on Form 10-K, Form 10-Q and Form
8-K, which contain additional important factors that could cause
RailAmerica's actual results to differ from its current
expectations and from the forward-looking statements contained in
this press release. RailAmerica, Inc. ("RailAmerica") (NYSE:RRA)
announced that it has entered into a definitive merger agreement
with an affiliate of Fortress Investment Group LLC ("Fortress")
under which RailAmerica's shareholders will receive $16.35 in cash
for each share of RailAmerica common stock they hold, a 32% premium
to the NYSE closing price of $12.38 on November 14, 2006 and a 49%
premium to the average closing price over the last 60 trading days.
The total value of the transaction, including the refinancing of
RailAmerica's existing debt, is approximately $1.1 billion. "This
transaction offers outstanding value to our shareholders. We view
the transaction with Fortress as the best alternative for
RailAmerica's shareholders and are excited about partnering with
Fortress going forward," said Charles Swinburn, Chief Executive
Officer of RailAmerica. Wesley R. Edens, CEO of Fortress stated,
"Fortress is excited to have the opportunity to invest in the North
American rail industry. RailAmerica has assembled a well
diversified portfolio of shortline railroads throughout North
America and we look forward to working with the management team to
grow the company." Morgan Stanley & Co. Incorporated acted as
financial advisor to RailAmerica in connection with the
transaction. Houlihan Lokey Howard & Zukin Financial Advisors,
Inc. provided an opinion to the Board of Directors of RailAmerica
that the merger consideration is fair to RailAmerica's
shareholders. Holland & Knight LLP acted as legal advisor to
RailAmerica and Skadden, Arps, Slate, Meagher & Flom LLP acted
as legal advisor to Fortress. The merger agreement was unanimously
approved by RailAmerica's full Board of Directors. The closing of
the transaction is subject to receipt of regulatory approvals, the
approval of the holders of two-thirds of RailAmerica's outstanding
common stock, and other customary conditions. The parties presently
anticipate consummating the transaction during the first quarter of
2007. Although the offer is not conditioned upon obtaining
financing, debt financing for the transaction has been fully
committed by Citigroup Global Markets Inc. and Morgan Stanley
Senior Funding, Inc. subject to customary closing conditions
including completion of definitive documentation. Upon completion
of the transaction, RailAmerica will become a privately held
company, and its common stock will no longer be publicly traded.
RailAmerica, Inc. (NYSE:RRA) is a leading short line and regional
rail service provider with 42 railroads operating approximately
7,800 miles in the United States and Canada. The Company is a
member of the Russell 2000 Index. Its website may be found at
http://www.railamerica.com. Fortress Investment Group LLC is a
global alternative asset manager with approximately $26 billion in
assets under management as of September 30, 2006. The firm was
founded in 1998, is headquartered in New York and has affiliates
with offices in Dallas, San Diego, Toronto, London, Rome, Frankfurt
and Sydney. Important Additional Information Will be Filed with the
SEC RailAmerica plans to file with the SEC a proxy statement in
connection with the transaction. RailAmerica shareholders are urged
to read the proxy statement and other relevant materials when they
become available because they will contain important information
about RailAmerica, Fortress and the proposed transaction. The final
proxy statement will be mailed to shareholders of RailAmerica. In
addition to the documents described above, RailAmerica files
annual, quarterly and current reports, proxy statements and other
information with the SEC. The proxy statement and other relevant
materials (when they become available), and any other documents
filed with the SEC by RailAmerica, are available without charge at
the SEC's website at http://www.sec.gov, or at RailAmerica 's
website at http://www.railamerica.com. Participants in Solicitation
Neither RailAmerica nor Fortress is currently engaged in a
solicitation of proxies from the stockholders of RailAmerica in
connection with the proposed transaction. If a proxy solicitation
commences, RailAmerica, Fortress and their respective directors and
officers and other members of management may be deemed to be
participants in such solicitation. Information regarding
RailAmerica 's directors and executive officers is available in its
Annual Report on Form 10-K for the year ended December 31, 2005,
and the proxy statement, dated April 17, 2006, for its 2006 annual
meeting of stockholders, which are filed with the SEC. Additional
information regarding the interests of such potential participants
will be included in the proxy statement and other relevant
documents to be filed with the SEC in connection with the proposed
transaction. DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS: This
press release contains forward-looking statements regarding future
events that involve risks and uncertainties that could cause actual
results to differ materially, including, but not necessarily
limited to, statements relating to RailAmerica's ability to close
the transaction, satisfaction of closing conditions and the timing
of the closing of the transaction. Forward-looking statements speak
only as of the date the statement was made. RailAmerica assumes no
obligation to update forward-looking information to reflect actual
results, changes in assumptions or changes in other factors
affecting forward-looking information. If RailAmerica does update
any forward-looking statement, no inference should be drawn that
RailAmerica will make additional updates with respect to that
statement or any other forward-looking statements. Please refer to
the reports that RailAmerica files from time to time with the
Securities and Exchange Commission on Form 10-K, Form 10-Q and Form
8-K, which contain additional important factors that could cause
RailAmerica's actual results to differ from its current
expectations and from the forward-looking statements contained in
this press release.
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