Salt Lake City, Utah, April 21, 2005 Savage Companies of Salt Lake City, Utah has announced that through its wholly owned subsidiary, Savage CANAC Corporation, it has entered into a definitive agreement with North American RailNet, Inc.of Bedford, Texas to acquire Alberta RailNet, Inc. (ARN), a short line railway operation based in Grande Prairie, Alberta, Canada. The closing of the purchase is expected to be effective May 1, 2005.
ARNs operations are comprised of 345 miles of railway in energy-rich northwestern Alberta and connect the Canadian National Railway (CN) to its shippers of coal, lumber, grain, fertilizer, aggregates and many other products. ARNs service territory is located exclusively in Alberta and stretches from Swan Landing (near Hinton, Alberta) in the south to Hythe, Alberta in the northwest branch (near Dawson Creek, British Columbia) and Wanham, Alberta in the northeast branch. The railway currently moves approximately 25,000 carloads per year, but Savage expects that growth, particularly in coal traffic, will result in the movement of more than 40,000 carloads by 2006.
Savage is a North American leader in providing materials management and transportation systems services to meet the unique needs of its customers in the electric power generation, oil refining, chemicals, coal production and Class I railroad industries. Savage views its entry into the short line railway industry as an opportunity to extend its nearly 60-year tradition and legacy of quality service to its customers, and to expand its service offerings to the rail industry. Savage and its subsidiary CANAC, Inc. (CANAC), currently provide industrial rail switching services at over 30 industrial locations and rail transloading services at over 35 locations throughout North America. In addition, CANAC has served railroads and railway projects in 71 countries with capacity planning, infrastructure, track construction and rehabilitation and training services. CANAC further provides technical assistance and management services to Transrail, S.A., the owner of the 1,200-mile railway concession to operate the former national railways in Senegal and Mali in western Africa.
In addition to its rail services operations, Savage owns and/or operates large bulk terminals for the handling of coal and petroleum coke, with vessel-loading ports in Los Angeles, California and Port Arthur, Texas, as well as major coal storage and loading unit-train terminals in Utah and California. Savage is also a joint venture partner and the operator of Gulf Sulphur Services Ltd., LLLP, the owner of the largest liquid-sulphur transportation and logistics system in the U.S., which includes the operation of vessels, barges and terminals on the U.S. Gulf Coast in support of oil refiners, gas processors and fertilizer producers. Savage also provides in-plant operating and fuel management services for several large utility concerns at various power plants in the U.S. Altogether, Savage handles over 60 million tons of products on behalf of its customers each year.
Savage President and CEO, Allen B. Alexander stated, We are extremely excited to make this strategic move to expand our rail services operations to serve CN, one of the premiere Class I railroads in North America, and to serve the shippers along the Alberta RailNet railway. Our entry into the North American short line business follows our overall strategy to meet the materials management and transportation systems needs of customers engaged in the distribution of large volume products and materials. We are also attracted to the opportunity to further expand our operations geographically in energy-rich Alberta. We look forward to the prospect of working with the shippers in Grande Prairie and elsewhere along the line, and becoming part of the communities which the railway serves.
Rob McKenney, Chairman and CEO of North American RailNet, comments, This railroad has provided excellent service to its shippers and connecting carriers, and we are confident it will continue to grow and prosper under the management of Savage Companies.