Short-line rail operator RailAmerica Inc. said Wednesday it has agreed to buy Atlas Railroad Construction Co. for $24 million in cash.
Under the terms of the deal, RailAmerica is paying $21.5 million for Atlas and an additional $2.5 million to cover closing adjustments for working capital. The transaction is expected to close Thursday.
Atlas is a railroad engineering, construction, maintenance and repair company that operates primarily in the Midwest and Northeast.
RailAmerica President and CEO John Giles said he expects the acquisition will position RailAmerica to take advantage of projected increases in railroad infrastructure spending over the next several years.
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"We believe that RailAmerica will create new opportunities for Atlas to grow its business by expanding into regions where RailAmerica's railroads already have a presence and by providing new services," Giles said.
RailAmerica estimates Atlas will generate roughly $25 million in revenue, $3.5 million in operating income and $2.1 million in depreciation and amortization over the next 12 months.
RailAmerica runs 40 railroads with 7,400 miles of track in 27 states and three Canadian provinces.
Shares fell 29 cents to $9.92 on Wednesday.