Genesee & Wyoming Inc. (NYSE:GWR) entered into a definitive agreement to acquire west end operations from Dakota, Minnesota & Eastern Railroad Corporation for approximately $210 million on January 2, 2014. Under the terms of the agreement, the purchase price is subject to certain adjustments including the purchase of inventory, equipment and vehicles. Genesee & Wyoming intends to fund the acquisition with borrowings under its existing credit facility. G&W expects to hire approximately 180 employees to staff the new company and anticipates these employees will come primarily from those currently working on the rail line. The transaction is subject to approval of the U.S. Surface Transportation Board and satisfaction of other customary closing conditions. Canadian Pacific Railway Limited, the parent of Dakota, Minnesota & Eastern Railroad Corporation will continue to own and operate approximately 1,900 miles of former Dakota, Minnesota & Eastern Railroad following the sale of the west end. Upon closing, the new railroad will be named the Rapid City, Pierre & Eastern Railroad.

The asset sale is expected to close by mid-2014. For Canadian Pacific Railway Limited, the sale is cash positive, anticipated to result in a net after-tax write down of approximately $240 million and will not have a material effect on anticipated future earnings. For Genesee & Wyoming Inc., the transaction is expected to generate annual revenues of approximately $65 million and be immediately accretive to book and cash earnings per share in 2014. Evercore Partners Inc. acted as the financial advisor to Canadian Pacific Railway Limited. Michael Williams of G&W Corporate Communications managed public relations for Canadian Pacific. Adeeb R. Fadil, Misan O. Ikomi, Jasmine Kaufman, Jamin R. Koslowe, Noreen Lavan, Gary B. Mandel, Krista B. McManus, Sophie A. Staples, and Anthony F. Vernace of Simpson Thacher acted as legal advisor to Genesee & Wyoming. Steve Quinlivan, Jim Bertrand, David Ezrilov, David Rifkind, Karl Hansen, Rob Devolve and Eric Galatz of Stinson Leonard Street LLP acted as legal advisors to Canadian Pacific.