Infrastructure investment firm Ridgewood Infrastructure announced this week that it had acquired a controlling interest in CA-based shortline railroad, Sierra Railroad Company.
At the same time, Sierra Railroad announced it is acquiring Central Valley Ag Transport, an agricultural products transload facility owner/operator along Sierra’s rail network. The CVAT acquisition strengthens Sierra’s platform through vertical integration of agricultural transload capabilities essential to California’s agricultural and dairy industries.
“In selecting a partner for Sierra, it was critical to find an investor with the sector expertise, aligned strategic perspective, and financial capacity to support the company’s next phase of growth,” Mike Hart, founder of Sierra Railroad Corporation, said. “Sierra had reached a point where meaningful near-term investment was required to pursue identified opportunities.”
Sierra’s subsidiary Sierra Northern Railway, which owns and operates the freight rail business and provides switching, storage, and transloading services, and Railpower, Inc., which owns and operates the only Federal Railroad Administration-approved hydrogen-powered locomotive in the U.S, were also included in the transaction.
“Sierra is a high-quality shortline rail platform with strong fundamentals, a diversified customer base, and a strategic footprint in some of California’s most important industrial and agricultural corridors,” Ryan Stewart, partner at Ridgewood Infrastructure, said. “Our team brings deep experience owning and operating shortline and other railroad businesses across the United States, and we see meaningful opportunities to build on Sierra’s strong foundation by driving additional freight volumes for both existing customers and new customers, expanding transload capabilities, and supporting innovation across the platform.”
The acquisition is a turning point for Sierra, officials said.
“This partnership with Ridgewood marks an important next step for Sierra,” Kennan H. Beard III, Chief Executive Officer of Sierra Northern, said. “Ridgewood’s experience operating rail and infrastructure businesses, combined with their investment approach, gives us the resources and support to accelerate execution across the platform. We are focused on growing volumes, expanding transload capacity, and continuing to serve our customers with the reliability and responsiveness they expect.”