Affiliates of Paceline Equity Partners, LLC (“Paceline”), a Dallas-based private equity manager, today announced they have acquired R.E.L.A.M., Inc., a leading lessor of railroad maintenance-of-way (“MOW”) equipment, as well as Acme Construction Co., Inc. and Timiny RR Construction, Inc., the affiliated rail infrastructure and track maintenance services businesses (together “R.E.L.A.M.”, or the “Company”).
Headquartered outside of Cleveland, OH, R.E.L.A.M. provides its customers with a comprehensive set of MOW solutions, including an expansive equipment fleet used to maintain critical railroad infrastructure along with complementary track maintenance services. The Company has set the industry standard for quality and dependability, providing its MOW equipment and services to a blue-chip customer base comprised of Fortune 500 railroad operators and contractors throughout North America.
R.E.L.A.M. will operate together with 1435 Rail, Inc., a lessor of railroad MOW equipment, which was acquired by affiliates of Paceline on December 31, 2019, making the combined purchase price of the two acquisitions approximately $185 million. The R.E.L.A.M. brand will be adopted by the collective enterprise, which will have a larger, more diverse fleet of over 1,100 pieces of MOW equipment and an expanded set of service offerings designed to deliver enhanced value to its customers.
As part of the transaction, rail industry veteran John Roberts will serve as R.E.L.A.M.’s Chief Executive Officer. Mr. Roberts most recently served as President of Marmon Crane, a Berkshire Hathaway owned company, and prior to that spent over twenty years at Railserve, North America’s largest provider of in-plant railway services.
“This transaction brings together two dynamic players in the maintenance-of-way leasing market, allowing us to strategically expand our service offerings in the rental, leasing, and sales verticals,” said Mr. Roberts. “I am excited about the partnership with the Paceline team and I share their enthusiasm for the numerous benefits this transaction will bring to the Company’s customers, employees, and suppliers – most important of which is building on the unparalleled customer service that R.E.L.A.M. strives to provide.”
“R.E.L.A.M. is a highly strategic and complementary investment that will add to Paceline’s existing asset-rich platform in the railroad MOW space,” said Sam Loughlin, Chief Executive Officer of Paceline. “We look forward to partnering with the R.E.L.A.M. team to support the Company through its next stage of growth.” “Despite the current unprecedented macroeconomic backdrop, R.E.L.A.M. has demonstrated stable cash flows driven by non-discretionary maintenance and safety-related spending, making it a highly attractive and recession-resistant investment,” added Leigh Sansone, Chief Investment Officer of Paceline.
“It has been a pleasure getting to know the Paceline team, who shares a like-minded enthusiasm for the railroad industry and R.E.L.A.M,” said David M. Horth, owner of R.E.L.A.M. “This business has been in my family for over 100 years and I am confident that R.E.L.A.M. will continue to build on its record of success and growth under Paceline. I’m looking forward to my next adventure which will include continuing to work with the Company through my role as an advisory board member, and I am committed to working collaboratively with John to ensure a smooth transition.”
About Paceline Equity Partners
Paceline is a Dallas-based private equity manager focused on value-oriented, opportunistic, and special situations investments across corporate credit, real assets, and private equity. Paceline’s senior leadership team members average 20 years of professional experience. Prior to the formation of Paceline, the senior leadership team worked together for approximately 10 years at a global private equity manager and its affiliates. To learn more, please visit www.pacelineequity.com.
Gasthalter & Co.