Investopedia: Genesee's Bold Bid To Be The Leading Short-Line Operator

It's always interesting to see how nimble and well-managed companies can prosper by zigging when larger rivals zag. Class 1 railroad operators like Union Pacific (NYSE:UNP) and Norfolk Southern (NYSE:NSC) have spent the last three decades selling off their short-line operations in response to the Staggers Act, while short-line specialist Genesee & Wyoming (NYSE:GWR) has been busy buying short-line rails and building itself into one of the premier operators.

On Monday, Genesee announced a major expansion of that strategy - agreeing to acquire fellow short-line operator RailAmerica (NYSE:RA) for $27.50 per share or about $1.4 billion overall. This is a very sizable deal for Genesee & Wyoming and one of those bold moves that will either vault the company to a new level of operating performance or saddle the company for years with debt and non-synergistic assets.

Please continue here:
http://stocks.investopedia.com/stock-analysis/2012/Genesees-Bold-Bid-To-Be-The-Leading-Short-Line-Operator-GWR-RA-UNP-NSC0723.aspx