Related Fund Management, Brookhaven Rail Partners and Stephens Capital Partners LLC today announced the acquisition of Pioneer Railcorp (OTC: PRRR, “Pioneer”), a railroad holding company that owns short-line railroads and several other railroad-related businesses including a railroad equipment company and a contract switching services company.
Shares of Pioneer common stock, which traded on the OTC market under the ticker symbol “PRRR”, were converted into the right to receive $18.81 per share effective upon the closing of the transaction.
BRX Transportation Holdings, LLC (“BRX”), a partnership between Related Infrastructure, a subsidiary of Related Fund Management, Brookhaven Rail Partners and Stephens Capital Partners, LLC, was formed to purchase Pioneer as a platform investment and intends to invest additional capital to upgrade Pioneer’s existing infrastructure and to grow Pioneer’s franchise through industrial development and the expansion of services to its customers. BRX also intends to pursue the acquisition of additional short-line railroad companies.
Pioneer will be led by BRX partner and industry veteran Alex Yeros as its new Chief Executive Officer, Ross Grantham as Chief Operating Officer and Carrie Genualdi as Chief Financial Officer. Yeros has three decades of experience acquiring and growing railroads and other rail-related businesses having served as chief investment officer and other industrial development roles at OmniTRAX, another leading short-line railroad company. Genualdi comes to Pioneer after spending 10 years at Genesee & Wyoming as director of finance, and Grantham has 20+ years’ experience working in overseeing operations at both Class I and short-line railroads.
Andrew Right, managing partner of Related Infrastructure, said, “Short-line railroads play a key role in our country’s transportation infrastructure and are critical to the national and global economy. Pioneer, operating across 12 states, services a diverse set of customers with a wide array of cargo from agriculture to finished products. We are excited to work with Brookhaven and the talented team at Pioneer to invest in the business, to provide even better service to our customers and to further grow the business by adding new customers who can benefit from the reliability and cost advantages of rail transport and by driving expansion across the platform.”
Alex Yeros, BRX partner and new Pioneer CEO, said, “We are excited to partner with Related and Stephens on this great opportunity. Pioneer provides us a solid foundation for growth with experienced employees and a strong and diverse customer base. We look forward to engaging with all of Pioneer’s customers to enhance our service relationships and explore opportunities for growth and efficiency. Pioneer gives us a platform to implement our proven industrial development strategies that create investment, tax base and jobs, fostering the economic vitality of the communities in which we operate. We also congratulate Pioneer’s board of directors, management and shareholders on building a strong business and coming together to effectuate this exciting transaction.”
Pioneer Railcorp is the parent company of 15 short-line common carrier railroad operations in 12 states, an equipment leasing company, two service companies and a contract services switching company. Pioneer and its subsidiaries operate in the following states: Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Michigan, Mississippi, Ohio, Pennsylvania and Tennessee. The transaction follows a proxy and shareholder vote and unanimous approval by Pioneer’s independent directors.
Arnold & Porter acted as legal counsel to BRX in the transaction. BMO served as financial advisor and Briggs and Morgan, P.A. served as legal advisor to Pioneer.
Related Companies is a global real estate and lifestyle company defined by innovation and the most prominent privately-owned real estate firm in the United States. Formed over 40 years ago, Related is a fully-integrated, highly diversified industry leader with experience in virtually every aspect of development, acquisitions, management, finance, marketing and sales. With over $50 billion in assets owned or under development including the 28-acre Hudson Yards neighborhood development on Manhattan’s West Side, The Grand and Related Santa Clara in California and The 78 in Chicago. Related was recently named to Fast Company Magazine’s list 50 Most Innovative Companies in the World. Related also has significant experience investing in operating businesses including its acquisitions of both Equinox and SoulCycle.
Related Fund Management is the investment management arm of global real estate firm Related Companies. Since inception, Related Fund Management has raised over $5 billion of capital across a variety of different investment vehicles and strategies. Related Infrastructure, a division within Related Fund Management, is a platform that focuses on investing in operating businesses and select development opportunities, specifically (a) companies that develop, service and manage assets or networks of assets in the transportation and infrastructure sectors, many of which derive substantial value from real estate or real estate related features and components and (b) infrastructure developments where Related’s construction management and real estate development and operational expertise provide a unique perspective and competitive advantage.
Related Infrastructure uniquely combines expertise in infrastructure investment, private equity and real estate and derives a significant competitive advantage versus other potential investors by leveraging Related’s corporate expertise in real estate analysis, development and construction to better control costs in the construction, rehabilitation and operation of assets as well as a highly differentiated network to source investment opportunities. Related Infrastructure also recently invested in Conrac Solutions, a leading private operator, developer and financier of airport consolidated rent-a-car facilities (ConRACs). For more information on Related, please visit www.Related.com.
Brookhaven Rail Partners is an affiliate of Denver-based Brookhaven Capital Partners, a privately held real estate and infrastructure investment and management firm. For three decades, Brookhaven’s principals have invested in and operated short-line railroads, deep water ports and terminals, building a leading short-line railroad holding company and establishing award-winning rail-served industrial parks. Brookhaven specializes in developing critical transportation assets that support industry and promote new economic development, community investment and job creation. For more information on Brookhaven, please visit www.BrookhavenPartners.com.
Stephens Capital Partners LLC is the private equity affiliate of Stephens Inc., a full-service, privately-owned investment banking firm based in Little Rock, Arkansas, with offices across the U.S. and in Europe. Founded in 1933, Stephens has decades of experience in corporate finance, financial planning, mergers and acquisitions, insurance services, research and public finance. The firm has conducted private equity transactions for over 60 years and seeks to be a reliable long-term partner to management of growing companies. For more information on Stephens, please visit www.Stephens.com.
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