Short line operator Regional Rail will be acquiring Carolina Coastal Railway, a 180-mile freight rail line located primarily in North Carolina.
The acquisition, announced Monday by Regional Rail’s parent company 3i, a U.K.-based private equity firm, is subject to approval by the Surface Transportation Board. Financial terms weren’t disclosed.
The short line provides freight rail and car storage services to over 45 customers, including aggregates, food and agriculture, chemicals, and metals.
Carolina Coastal’s North Carolina assets include a 142-mile line between Raleigh and Plymouth and a 17-mile line between Belhaven and Pinetown. It interchanges with Norfolk Southern (NYSE: NSC) at Raleigh and Chocowinity and with CSX (NASDAQ: CSX) at Wilson and Greenville. It will be leasing a Norfolk Southern line in South Carolina, according to its website.
The short line also has connections to a barge facility in Belhaven and provides switching services to the Port of Morehead City in North Carolina. The short line additionally has sites available for industrial development and transloading.
“Carolina Coastal is a great fit with Regional Rail as it benefits from an attractive mix of industrial customers and further diversifies our existing freight-rail platform from an end-market and geographic perspective,” said Regional Rail CEO Al Sauer. “We look forward to welcoming all of the Carolina Coastal employees to Regional Rail and working with them to continue the company’s successful growth.”
After the acquisition, Regional Rail will operate 25 line segments across five states, with almost 550 miles of track, according to Rob Collins, managing partner for 3i’s North American infrastructure division. 3i invested in Regional Rail in July 2019.
Through the six short lines it currently owns, Regional Rail operates over 360 miles of track and has rail freight, railcar storage and transloading operations across New York, Pennsylvania, Delaware and Florida. Regional Rail moved over 29,000 carloads and served over 140 customers in 2018, according to 3i. Regional Rail also provides railroad crossing signal design, construction, inspection and maintenance services to over 100 short line and industrial customers across 20 states, 3i said.
Carolina Coastal’s acquisition is just one of several announced in recent months as the industry is still ripe for mergers and acquisitions, according to experts.