Boca based RailAmerica leaving town

By John Johnston
Managing Editor

In a merger approved by the Surface Transportation Board in September 2007, New York based private equity firm Fortress Investment Group LLC has announced its acquisition of control over Florida East Coast Railroad (FECR).

Fortress, which also controls Boca Raton based RailAmerica, will now merge RailAmerica with FECR, and relocate the Boca operation to Jacksonville, resulting in the laying off of about 90 Boca Raton based employees.

When RailAmerica agreed to a merger with Fortress in late 2006, the total value of the transaction, including the refinancing of RailAmerica’s existing debt, was approximately $1.1 billion, according to Fortress.

At the time of the merger with Fortress, RailAmerica CEO Charles Swinburn said: “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.“

“Fortress is excited to have the opportunity to invest in the North American rail industry,” added Fortress CEO Wesley R. Edens. “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.”

Florida East Coast Railroad (FECR) is a regional freight railroad that operates 351 miles of mainline track from Jacksonville to Miami and provides intermodal drayage services at terminals located in Atlanta, Jacksonville, Ft. Pierce, Ft. Lauderdale and Miami.

RailAmerica is a leading short line and regional rail service provider with 41 short line and regional railroads, operating approximately 7,800 miles in the United States and Canada.  The company's railroads operate in 25 states and three Canadian provinces.

And in a case of Boca’s continuing rail involvement, Gary O. Marino was a co-founder of RailAmerica in 1992 with his brother John H. Marino. Until March 2004, he was also the company’s chairman.  Under his tenure RailAmerica grew from a private company owning one railroad, to a New York Stock Exchange listed company owning 47 railroads with revenue of about $360 million.  Mario retired from RailAmerica in April 2004, and is now Chairman, president and CEO of Patriot Rail Corp, also based in Boca Raton.