Transportation and logistics service provider OmniTrax Inc. will acquire Winchester & Western Railroad (W&W) from its parent company Covia Holdings Corp. for $105 million, saying today the move will allow it to provide freight delivery access to large population centers on the U.S. east coast.
Denver-based OmniTrax, which is an affiliate of the Broe Group—a real estate, transportation, energy, and investment organization—said the acquisition is expected to close during the third quarter, following customary closing conditions including Surface Transportation Board review.
The deal is expected to expand OmniTrax' short line portfolio into key distribution locations in multiple east coast markets, providing its customers access to 100 million people within a day's transit. OmniTrax says its core capabilities range from providing transportation and supply chain management services to railroad and port companies, to providing intermodal and industrial switching operations to railroads, ports, and a range of industrial companies.
Martinsburg, W.Va.-based W&W runs trains in Maryland, New Jersey, West Virginia, and Virginia, employing 60 workers and operating 100 miles of track with 17 locomotives. Those assets will join an OmniTRAX business that includes railroads, terminals and transload facilities employing 250 people at more than 20 locations throughout 12 states and the province of Saskatchewan.
However, the combined assets will create more value than those basic figures suggest, Kevin Shuba, CEO of OmniTrax, said in an email. The firm's supply chain network analysis shows that the region opened up by the W&W acquisition is one of the best multi-mode logistics distribution hubs in North America, specifically when looking to convert long haul trucking to rail, Shuba said.
In addition, the deal adds both substantial carloads now and also a significant opportunity for growth in the next five years, including the addition of 35 new customers, he said. "OmniTRAX's management expertise and our Precision Scheduled Short Line Railroading... will bring this 100-year-old railroad to modern times, making it and our customer's businesses far more efficient and profitable," Shuba said.