Genesee & Wyoming Acquiring the Maryland Midland RR

Genesee & Wyoming Announces Agreement to Acquire the Maryland Midland


GREENWICH, Conn., Oct. 22, 2007 /PRNewswire-FirstCall/ -- Genesee &
Wyoming Inc. (GWI) (NYSE: GWR) announced today that it has entered
into an agreement to acquire 87.4% of Maryland Midland Railway, Inc.
(Maryland Midland) for cash consideration of approximately $29.1
million, with adjustments for working capital at the time of closing.
The transaction is subject to customary closing conditions, including
receipt of regulatory approvals and Maryland Midland stockholder
approval. GWI has secured voting agreements from the requisite number
of Maryland Midland stockholders needed to approve the transaction,
which is expected to close during the fourth quarter of 2007.

Headquartered 50 miles northwest of Baltimore, the Maryland Midland
operates over 63 miles of track between Glyndon and Highfield,
Maryland (near the Pennsylvania border), and between Walkersville and
Taneytown, Maryland. Maryland Midland has 30 employees, 10
locomotives and is an interline carrier with CSX.

The Maryland Midland carries approximately 16,000 carloads per year,
with roughly 90% of its traffic in the cement and stone industries.
The railroad's largest customer is Lehigh Cement's recently upgraded
facility in Union Bridge, Maryland. Lehigh is currently the largest
stockholder of the railroad and will retain its 12.6% ownership.

The Maryland Midland is located approximately 40 miles from GWI's
York Railway in southeastern Pennsylvania. GWI expects the
acquisition will be immediately accretive to its earnings per share.

(Photo: http://www.newscom.com/cgi-bin/prnh/20071022/NYM034 )

"The Maryland Midland is an excellent short line railroad and a good
geographic fit with our York operations," said GWI Chief Executive
Officer John C. Hellmann. "This proximity lends itself to
efficiencies that make the financial combination attractive. The
Maryland Midland's customer base is highly competitive in the U.S.
cement and aggregates market, and we look forward to providing
quality customer service for the long term."

GWI is a leading owner and operator of short line and regional
freight railroads in the United States, Canada and Australia and owns
a minority interest in a railroad in Bolivia. Operations currently
consist of 47 railroads organized in nine regions, including service
at 12 U.S. ports, contract coal loading and industrial switching. GWI
operates more than 5,700 miles of owned and leased track and
approximately 3,500 additional miles under track access arrangements.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements regarding
future events and the future performance of Genesee & Wyoming Inc.
that involve risks and uncertainties that could cause actual results
to differ materially from its current expectations including, but not
limited to, the consummation of the proposed acquisition transaction;
economic, political and industry conditions; customer demand,
retention and contract continuation; legislative and regulatory
developments; increased competition in relevant markets; funding
needs and financing sources; susceptibility to various legal claims
and lawsuits; strikes or work stoppages; severe weather conditions
and other natural occurrences; and others. Words such
as "anticipates," "intends," "plans," "believes," "seeks," "expects,"
"estimates," variations of these words and similar expressions are
intended to identify these forward-looking statements. GWI refers you
to the documents that it files from time to time with the Securities
and Exchange Commission, such as GWI's Forms 10-Q and 10-K which
contain additional important factors that could cause its actual
results to differ from its current expectations and from the forward-
looking statements contained in this press release. GWI disclaims any
intention to update the current expectations or forward looking
statements contained in this press release.

With this acquisition by GWI and already having YorkRail, is there a chance they could make a run at the Hanover Sub of CSX? Maryland Midland tried this move years ago, but was rebuffed by CSX. The railroad could then connect from York to Hanover to Gettysburg to Highfield(MMID)

I'm not sure whether the cost of a direct connection would be worth it in terms of potential traffic flow between the two operations. Much would depend on where Lehigh's cement traffic goes from the MMID and where the Gladfelter traffic from Yorkrail goes. More important to Lehigh and the MMID is to get to the NS at Hagerstown, which would give them a competitive outlet. Right now, MMID is completely dependent on CSX, and CSX obviously is cool to sharing the business with NS. There's some speculation that G&W might have more leverage with CSX to force trackage rights or sale of the Highfield-Hagerstown section.

CSX's principal interest in the ex-WM "Dutch Line" (ie, Glyndon-Hanover) is the stone traffic from Bittinger, west of Hanover.

Anyone have any idea how often the Midland runs on the Walkersville line? I live in Frederick and I've never seen anything running on this line, except for the passenger operations (Walkersville Southern) on the southern end.

Mike K3CXG
in Frederick

Midland does not run on Walkersville. There is no business that takes rail delivery anymore, plus the tracks north of town are mostly overgrown with tall grasses and trees. The crossing at DevilBliss bridge rd used to have lights, but they removed them years ago.

Generally speaking, the MMID doesn't operate south of the quarry in Woodsboro. It acquired the line south of Woodsboro down to North Glade Road and uses it for car storage as required. Between North Glade Road and Walkersville the line is intact but covered with brush.

Are the tracks still in place from Littlestown to Hanover?

No, the tracks had been removed years ago. The station that was in Littlestown was torn down a couple years ago to make way for a new building that houses a dance studio and dairy parlor. An old grain elevator still stands across the street. Rebuilding the line would be difficult to say the least, as a good chunk of right of way seems to have been built up with residential district from what I can see in Littlestown. The line ends just south of the PA/MD state line. The last siding is for Ferrell Gas. MMID usually has two cars there, though the siding can only hold 1, the second sits on the main line on the north side of the level crossing.

Has this deal been completed yet, or are they still working things out? haven't heard anything.

Deal is complete. Lehigh Portland retains their 12% ownership in the railroad.