Levine Leichtman Exits Regional Rail

Levine Leichtman Capital Partners (LLCP) has completed the sale of Regional Rail to 3i Group. LLCP acquired the company in October 2015 from private equity firm FirstCity Crestone.

Regional Rail is an operator of short line railroads in the mid-Atlantic region of the United States with over 155 miles of track connecting into a Class 1 railroad network. The company services a range of end-markets including agriculture, lumber, energy and metal products.  In addition, Regional Rail’s subsidiary, Diamondback Signal, provides engineering, construction and maintenance for highway-rail crossings throughout the United States.  Regional Rail is led by CEO Al Sauer and is headquartered near Philadelphia in Kennett Square, PA (www.regional-rail.com).

Regional Rail was formed in August 2007 to acquire East Penn Railroad which operated 109 miles of track at two locations in Delaware and Eastern Pennsylvania. Later acquisitions included Middletown & New Jersey Railroad which operated 43 miles of track in Southeastern New York State (April 2009); Tyburn Railroad which operated a 14-acre rail-to-truck transload facility, a regional trucking company, and a terminal switching operation in Morrisville, PA (September 2011); and Diamondback Signal which was acquired in August 2012.

“The Regional Rail investment has been very successful for both LLCP and the company’s management team,” said Lauren Leichtman, founding partner and co-chairperson of the executive committee of LLCP. “We are proud to have enhanced the value of Regional Rail through multiple avenues including winning new customers, acquiring additional track miles and optimizing service levels and operations. We wish the management team continued success.”

LLCP invests in middle market companies located in the United States and Europe. The firm is based in Beverly Hills with offices in New York, Dallas, Chicago, Charlotte, London, Stockholm and The Hague (www.llcp.com).

“We have truly enjoyed our partnership with the team at LLCP, who helped support our growth initiatives,” said Mr. Sauer. “We will truly miss working with them but are excited to enter our next phase of growth under 3i.”

3i Group (LSE: III) is a multinational private equity and venture capital company based in London, UK (www.3i.com).

BMO Capital Markets was the financial advisor to Regional Rail.

© 2019 Private Equity Professional | July 9, 2019

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