OmniTRAX is acquiring shortline railroad assets in northern Ohio, enabling the privately held company to expand its access to the Port of Cleveland.
An OmniTRAX affiliate and an affiliate of the Broe Group have agreed to acquire the Cleveland Commercial Railroad Group (CCRL) and its subsidiary, Cleveland Harbor Belt Railroad (CHB).
Following the acquisition, CCRL will be renamed the Cleveland & Cuyahoga Railway, while CHB will be renamed the Cleveland Port Railway.
The two rail assets ship primarily steel, scrap metals, grain and chemicals. CCRL, which operates on 35 miles of track in northern Ohio, interchanges with Norfolk Southern (NYSE: NSC) and the Wheeling & Lake Erie Railway. CHB, which manages the Port of Cleveland’s rail switching service, interchanges with NSC and CSX (NYSE: CSX).
“We look forward to working with the Port of Cleveland and are confident our partnership will lead to significant growth in both marine and rail activity,” said OmniTRAX chief executive officer Kevin Shuba. “We expect the partnership with the Port of Cleveland will be another example of the success OmniTRAX and its partners have achieved when rail and maritime work together.”
The price of the transaction, which is expected to close in late August, was not disclosed.
“The Port of Cleveland is excited to partner with OmniTRAX and further build out the on-dock rail business at our general docks,” said David Gutheil, chief commercial officer at the Port of Cleveland. “OmniTRAX has a substantial customer base across their existing network and a history of leveraging their strong partnerships with the Class I railroads to increase revenues and find new lines of business.”
The acquisition will join other Ohio assets owned by OmniTRAX, including the Newburgh & South Shore Railroad in Cleveland and the Northern Ohio and Western Railway in Toledo. Both these assets serve the Midwest and Great Lakes.
The transaction follows another acquisition OmniTRAX made last month. The company said it was acquiring the Winchester & Western Railroad (WW) from Covia Holdings (NYSE: CVIA) for $105 million. The deal, which is expected to close in the third quarter of 2019 pending review from the Surface Transportation Board, would expand the OmniTRAX’s portfolio to include key new distribution markets in multiple East Coast markets as a result of WW’s operations in Maryland, New Jersey, Virginia and West Virginia, the company said on July 26.
OmniTRAX currently operates 20 shortline railroads, according to its website.
