Pioneer Railcorp Enters into Merger Agreement to be Acquired by BRX Transportation Holdings for $18.81 Per Share in Cash

PEORIA, Ill., May 17, 2019 /PRNewswire/ -- Pioneer Railcorp (OTC: PRRR, "Pioneer"), a railroad holding company that owns short-line railroads and several other railroad-related businesses including a railroad equipment company and a contract switching services company, and BRX Transportation Holdings, LLC ("BRX"), an entity formed by Brookhaven Rail Partners ("Brookhaven") and Related Infrastructure ("Related"), announced entry into a definitive merger agreement under which BRX will acquire Pioneer for $18.81 per share in cash. The agreement, which has been unanimously approved by Pioneer's independent directors, represents a premium of approximately 100.7% over Pioneer's closing stock price on May 16, 2019, the last trading day prior to the announcement of the transaction.

"We look forward to this next chapter in Pioneer's journey and anticipate it will have a bright future under new ownership," said Mike Carr, President and Chief Executive Officer of Pioneer.

"We are excited to partner with Related Infrastructure and to have worked with Pioneer's management and board on a transaction that brings great value to its shareholders, its customers, and the communities it serves.  Pioneer fits perfectly with Brookhaven's philosophy of identifying opportunities where our hands-on management expertise, proprietary value creation strategies, and deep industry relationships provide us with a competitive advantage and the ability to create value," said Alex Yeros, Principal of Brookhaven.

Related Infrastructure, a subsidiary of Related Fund Management which has raised over $5 billion of capital across a variety of different investment vehicles and strategies, invests in companies that develop, operate and service transportation infrastructure throughout the United States.  Andrew Right, Managing Partner of Related Infrastructure said, "We are pleased to partner with Brookhaven to build a rail-based infrastructure platform.  We appreciate the work Mike Carr and his team have done to create the Pioneer portfolio of rail businesses.  We look forward to working with Alex and the entire team at Brookhaven, an industry leading team with over 25 years of experience building businesses in the short-line rail industry to further drive expansion of the platform." 

Under the terms of the merger agreement, BRX will acquire through merger all of the outstanding shares of Pioneer's Class A common stock. Shareholders other than Pioneer's subsidiary, Heartland Rail Investments LLC, will receive $18.81 per share in cash and the Heartland shares will be canceled without consideration.

In connection with the execution of the merger agreement, certain stockholders of Pioneer, together holding a significant portion of the outstanding shares of common stock of Pioneer, have agreed to vote their shares in favor of the transaction under a voting and support agreement.

The consummation of the merger is subject to various closing conditions, including approval by Pioneer's shareholders, Surface Transportation Board approval, and operating performance by Pioneer within a specified working capital floor and debt ceiling.  The merger is not subject to a financing condition.  Subject to satisfaction of the closing conditions, the transaction is expected to close in the third quarter of 2019.

Arnold & Porter is acting as legal advisor to BRX in this transaction.  BMO Capital Markets is serving as exclusive financial advisor to Pioneer in connection with this transaction and Briggs and Morgan, P.A. is acting as Pioneer's legal advisor.

About Pioneer
Pioneer Railcorp is the parent company of 17 short-line common carrier railroad operations, an equipment leasing company, two service companies and a contract services switching company.  Pioneer and its subsidiaries operate in the following states:  Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Michigan, Mississippi, Ohio, Pennsylvania and Tennessee.  For more information on Pioneer, please visit www.Pioneer-Railcorp.com.

About Brookhaven
Brookhaven Rail Partners is an affiliate of Denver-based Brookhaven Capital Partners, a privately held, real estate and infrastructure investment and management firm.  Brookhaven and its principals have a 25-year track record of investing in, operating and developing critical transportation assets that support industry, and promote new economic development, community investment, and job creation.  For more information on Brookhaven, please visit www.BrookhavenPartners.com.

About Related
Related Infrastructure is an affiliate of Related Fund Management, the investment management arm of global real estate firm Related Companies, staffed by a seasoned team of over 40 professionals.  Since inception, Related Fund Management has raised over $5 billion of capital across a variety of different investment vehicles and strategies. The platform is primarily focused on opportunistic real estate investments; the origination and acquisition of debt; multifamily housing opportunities; and investments in infrastructure-related development, management and services. Capitalizing on decades of experience as a developer, investor and operator and Related's deep expertise in public-private partnerships, Related Infrastructure invests in, and grows, infrastructure-related businesses and initiatives. Targeted investment opportunities include platforms that develop, service and manage transportation-related assets as well as infrastructure-related businesses, services and technologies.  For more information on Related, please visit www.Related.com.

www.pioneer-railcorp.com

SOURCE Pioneer Railcorp

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