RailAmerica Comes Public, Again (RA, FIG)

Private equity firms keep exiting their old buyouts when they can.  This morning we have an initial public offering from RailAmerica, Inc. (NYSE: RA) for some 22,000,000 shares of common stock.  This is being brought public by Fortress Investment Group LLC (NYSE: FIG).  This deal is listed as a 10,500,000 primary shares of common stock being sold, as well as 11,500,000 secondary shares of common stock by the RR Acquisition Holding LLC wholly-owned entity under private equity funds managed by an affiliate of Fortress Investment Group LLC.

RailAmerica’s $15.00 price is at the lower-end of its $15 to $16 indicated price range.  This buyout was announced back in 2006 and closed in 2007.  This one used to trade under the ticker “RRA” on the NYSE.

J.P. Morgan, Citigroup, Deutsche Bank, and Morgan Stanley were the listed underwriters in the deal.  These underwriters have a 30-day option to purchase up to 1,575,000 additional shares of common stock (and RR Acquisition Holding LLC granted the underwriters the option to purchase up to 1,725,000 additional shares) to cover any overallotments.

Fortress funds acquired the company in February 2007 and will continue to own approximately 55.8% of RailAmerica after the closing of the offering.

Fortress is down almost 2% at $5.45 and RailAmerica has not yet opened.

JON C. OGG
OCTOBER 13, 2009