Kansas company enters agreement to buy Ann Arbor Railroad
Daniel Brenner | AnnArbor.com
The Ann Arbor Railroad - a so-called "short line" that runs from Ann Arbor to Toledo - will be acquired by a Kansas transportation company that wants to expand into Ohio, according to the company.
A subsidiary of Watco Companies LLC has reached an agreement to purchase the private company's stock, which will be held in a voting trust "until the Surface Transportation Board (STB) approves the transaction, which is expected to be in late January or early February," according to Watco.
Information on the transaction details was not available Saturday. Estimates put the AAR annual revenue at $6 million per year.
The 50-mile Ann Arbor Railroad serves southeastern Michigan and the Toledo, Ohio markets focusing mostly on the automobile and manufacturing industries. Most of its operations are in Toledo, but its headquarters is in Howell.
The acquistion gives Watco access to what it describes as " significant rail terminals in the Toledo area focused on automobile loading for industry leaders Chrysler, General Motors, and Ford."
Its interchanges include Class 1 railroads Canadian National, CSXT, and Norfolk Southern as well as short lines Great Lakes Central, Indiana & Ohio and Wheeling & Lake Erie.
“This acquisition expands our rail network in the State of Michigan and allows us to build stronger relationships with our customers while also giving Watco the opportunity to serve the State of Ohio and its important industrial base,” said Ed McKechnie, Watco chief commercial officer, in a news release.
“The Ann Arbor Railroad team has prided itself in delivering high quality service to our Customers,” said Jim Erickson, president of the Ann Arbor Railroad, in the same release. “We are going to continue to build on that high expectation of service, and look forward to working together with the rest of the Watco team.”
The railway has been run by the Ann Arbor Acquisition Corp, according to rail history sites. It's been operating it its existing short-line format since 1988, from a Great Lakes Central Railroad interchange north of Ann Arbor. It also includes a branch line in Saline to the Faurecia plant.
Ann Arbor Railroad also controls some railway right-of-ways that the city hopes to acquire as part of a greenway project.
Watco is based in Pittsburg, Kansas. It has 3,500 miles of railway in the U.S., including at least 20 short-line railroads.