GREENWICH, Conn. — Freight railroad operator Genesee & Wyoming Inc. announced on Monday plans to acquire Emons Transportation Group Inc. for $18.5 million cash and the assumption of about $10.9 million of debt.
Genesee & Wyoming, based in Greenwich, Connecticut, said it will purchase outstanding shares of Emons, a short line railroad holding company with operations in Maine, New Hampshire, Vermont, Pennsylvania and Canada’s Province of Quebec, for $2.50 each, with the acquisition funded under its revolving credit facility.
Emons’ shares closed at $1.55 on Nasdaq before the deal was announced. Genesee & Wyoming’s shares closed at $29.64.
In the first year of operation, Genesee & Wyoming said it expects to reduce Emons’ operating expenses by about $1 million, mainly by absorbing administrative costs, and said additional operational savings will be achieved by coordinating certain rail operations in Quebec. The company said it expects the deal to add to its earnings per share.
The merger is subject to approval by Emons’ stockholders, regulators and other customary closing conditions. It is expected to be completed in the first quarter of 2002.