Gulf and Ohio

[cassfan3]

This article from the TRAINS newswire:

JACKSONVILLE, Fla. — RailAmerica has inked an agreement to acquire Gulf & Ohio’s three Alabama short lines. The deal will see the company purchase all assets of the Conecuh Valley Railroad, Three Notch Railroad, and the Wiregrass Central Railroad for $12.7 million.

Conecuh Valley operates 14 miles of ex-Central of Georgia track between Troy and Goshen, Ala. Three Notch operates 34 miles of ex-Louisville & Nashville track stretching from Andalusa to Georgiana, Ala. Wiregrass Central operates 19 miles of ex-Atlantic Coast Line track between Enterprise and Waterford, Ala. All three roads connect to CSX lines.

In its filings with the STB, RailAmerica said G&O owner Pete Claussen “has decided to sell these lines to RailAmerica’s affiliates in order to transition out of the railroad business.” The deal leaves G&O with five short lines in Tennessee and North Carolina.

RailAmerica is North America’s largest shortline holding company. The three railroads bring its total operations to 43.


....Gulf & Ohio getting out of the railroad business? That seems odd considering the just bought the L&C and restored a steam engine in the past year. What's the real story hear?

[SCFrankie]

That is rather strange.. I wonder who his other railroads will end up under if he really is getting out of the business? My guess is RailAmerica and G&W will be in a race to get them.

[ShortlinesUSA]

Don't read too far into this-- I'm not sure if that is precisely what Mr. Claussen said or if it was placed somewhere out of context, but every indication I have is that G&O is NOT getting out of the railroad business. Mr. Claussen does intend to retire relatively soon, and there are other family members involved to keep the company going. The move to sell the Alabama lines was likely taken to keep the company focused on a relatively compact geographic region in the Carolinas and Tennessee.

G&O seems to differ from other shortline holding companies, in that they are one of few not "growing for the sake of growing." They've stayed at a relatively stable size over the last several years, and they have divested a number of lines as they've gotten into other operations.

I used a lot of "may's and should's" in saying all of this, because I did not speak with Mr. Claussen himself, but this should be considered to be better info than what was one quote in a paper. I believe the main intent was to relay that Mr. Claussen himself is getting out of the business, but G&O will continue as a company.

[Joe the Photog]

Trains had an article on the G&O a few years ago where Jim Wrinn mentioned they often sold railroads if it made more sense geographically. They mentioned the Lexington & Ohio was sold to RJC because it was close to some other R.J. Corman lines. He was quoted as saying he didn't mnd selling off railroads.

Also, I believe Claussen is getting close to 70 years old. "Getting out of the railroad business" probably was refering to him and not the company. It doesn't make sense any other way. To go through the trouble of buying the L&C, which is in South Carolina, for those who work at Trains, and then sell it off right away. I get the feeling that the deal between the G&O and L&C was a long time in the making, even longer than Carmello going to the Knicks. With the Springs family selling everything off, there had to have been conversations going on for a long time. (My speculation)

Of course, we could all be wrong. You'd expect Trains to get a little more clarification from the man himself.

[SCFrankie]

Could this have something to do with the decision to sell?

http://www.utu.org/worksite/print_ne...rticleID=53844

[ShortlinesUSA]

Wouldn't be the first time! Pete sold out of a sizeable operation in south Georgia (the combined Atlantic & Gulf and Georgia & Florida systems) for precisely this reason. RailNet bought it, and they have since been bought out by OmniTrax, who is the present operator. But, as you elude, they were tearing G&O wings off the power shortly after the ink dried on the ballots and they were counted...

[SCFrankie]

Originally Posted by ShortlinesUSA

Wouldn't be the first time! Pete sold out of a sizeable operation in south Georgia (the combined Alabama & Gulf and Georgia & Florida systems) for precisely this reason. RailNet bought it, and they have since been bought out by OmniTrax, who is the present operator. But, as you elude, they were tearing G&O wings off the power shortly after the ink dried on the ballots and they were counted...

Yep, I remember being told that story about the A&G/G&F operation.

But then again, those three Alabama railroads were at the bottom of the G&O food chain so to speak. The Wiregrass Central has never been the same since they lost the unit grain traffic. Neither the Conecuh Valley or Three Notch seem to have all that large of a traffic base.

Either way, this could have been a lot worse. At least G&W didn't get them (yet). That would certainly have given them a monopoly in SE Alabama.

[SCFrankie]

Anyone have updates on this purchase?

I have been checking the STB for final approval notices, but nothing yet. These railroads were briefly added to the subsidiary list on the RailAmerica website, but have since vanished...

[Joe the Photog]

The G&O web site is not the place to look either. Not only do they still list the Alabama lines, they still have the press release up announcing the impending purchase of the L&C, six months or more after the deal was complete.

[troy12n]

RE: the Alabama lines. If these lines were truly profitable, they would still belong to NS, CSX and IC. So I guess be glad they even exist.

[SCFrankie]

Originally Posted by Joe the Photog

The G&O web site is not the place to look either. Not only do they still list the Alabama lines, they still have the press release up announcing the impending purchase of the L&C, six months or more after the deal was complete.

Yep, they rarely update it. There was a page up on the M&SF, which was sold a year and a half ago.. It was only recently removed.

Found something interesting today though, RailAmerica included all three Alabama lines in their quarterly carload report:

http://money.msn.com/business-news/a...14&ID=13772999

May 2011 carloads include 563 carloads from the acquisition of three railroads in Alabama.

Still nothing from the STB though.

[ShortlinesUSA]

RailAmerica is moving a GP15D from the Carolina Piedmont to the TNR, so change is afoot with RA now in charge.