Infrastructure fund pays $1B to acquire largest US regional railroad
FTAI ( NYSE: FIP), which owns short line and terminal switching operator Transtar, will pay The Wheeling Corp. $1.05 billion to acquire the regional railroad created from lines that Norfolk Southern spun off in 1990. FTAI is managed by an affiliate of Fortress Investment Group.
The Class II W&LE serves more than 250 customers in Ohio, Pennsylvania, West Virginia, and Maryland. The W&LE connects to Transtar's Union Railroad in the Pittsburgh area.
'Growing our freight rail platform has been a key focus for FIP, and we are thrilled to have this opportunity to combine with the W&LE,' FTAI Chief Executive Ken Nicholson said in a statement. 'We believe the W&LE is an excellent candidate for a combination with Transtar, adding scale, diversification, and network reach. Together, Transtar and the W&LE have identified several growth opportunities and operating efficiencies that we expect to drive substantial growth.'
Since 1992, Wheeling Corp. CEO Larry Parsons has been the driving force behind the rebirth of the W&LE. He guided the railroad through a period of extraordinary change and transformed a coal-dependent line into a modern, customer-focused regional railroad, FTAI said.
'His leadership has left an indelible mark on the company and the communities it serves. In seeking a long-term partner to carry this legacy forward, Mr. Parsons chose FTAI Infrastructure Inc. and Transtar, whose values and operational excellence reflect the foundation he spent a lifetime building,' FTAI said.
The railroad carries more than 140,000 carloads per year, interchanges with three Class I railroads and 16 regional and short line railroads, and employs more than 425 people.
W&LE currently handles steel and raw materials to and from five different mills; aggregates from three different quarries; chemicals; industrial minerals, including frac sand; plastic products; grain and food products; lumber; paper; and petroleum products, including LPG and NGL produced in the Marcellus and Utica shale formations.
The transaction is expected to close into a voting trust in the third quarter of 2025, subject to customary closing conditions. FTAI said it expects to gain control of the W&LE upon receipt of approval by the Surface Transportation Board, at which time the W&LE will be an affiliate of Transtar.
Pittsburgh-based Transtar operates former U.S. Steel properties, including The Union Railroad; the East Ohio Valley Railway; The Lake Terminal Railroad in Lorain, Ohio; the Delray Connecting Railroad in the Detroit area; The Gary Railway in Indiana; The Fairfield Southern in Alabama; and the Texas & Northern.
In May 1990, Wheeling Acquisition Corp. paid Norfolk Southern $40 million for 446 miles of track that became the core of today's W&LE. NS simultaneously leased the new railroad an additional 121 miles of track.
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Find more articles by Stuart Chirls here.
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