Auxo, a private investment firm, is developing a set of rail maintenance-of-way services through their acquisition of two companies in Q4 2021.
First, in October, the company acquired Genesis Rail Services, which is a full-service railroad maintenance company based in Bluefield, W. Va., and Roanoke, Va. Cody Harman, son of company founder Jeff Harman, will retain a minority ownership stake in the company and continue in his role running day-to-day operations.
Second, in December, Auxo acquired Ferrovia Services, a provider of railroad and Department of Transportation vegetation management services with locations across the U.S. The company is based in Auburn, Ala.
Founded in 2009, Genesis Rail Services provides outsourced mission-critical maintenance of way (MOW), mechanical and construction services to Class I, Class II and industrial railroads across the country. Class I railroads are the largest railroad companies in the United States, owning thousands of track miles that require routine and recurring maintenance and replacement, as well as derailment and yard services. The company recently patented its flagship service – a tie plate distribution system which significantly reduces costs while improving uptime for rail operators.
Founded in 1976, Ferrovia provides mission-critical and regulated vegetation management, inspection, and abatement services to North America’s Class I railroads, as well as a variety of Class II, short line, industrial railroad customers, state DoTs, and utility providers. Company founder Jeff Welsh, CEO Allen Blythe and COO Ryan Cammack will retain a meaningful ownership stake, with Blythe and Cammack continuing in their existing roles and Welsh remaining in an advisory role.
Auxo will integrate the two companies under one platform, facilitating the cross-selling of services to improve offerings to existing customers.
The railroad industry – driven by economic recovery, restocking conditions and a tight trucking market – is projected to see significant growth, particularly in the area of intermodal freight, leading to more wear-and-tear and increased demand for reliable and cost-effective rail maintenance.
Genesis Rail Services works with many rail companies in the Class I and Class II categories, including Kansas City Southern, Norfolk Southern, Canadian National, Amtrak, and Florida East Coast Railway, among others. Over the past four years, the company has introduced several new services, including a patented tie plate distribution process, thermite welding, pile driving, derailment services, ballast cleaning, and traffic control. Combining Genesis’ broader maintenance of way capabilities with Ferrovia’s industry-leading vegetation management offerings is a significant step toward building the industry’s first nationwide platform to meet growing demand for a complete suite of maintenance and mechanical services.
“As railways continue to outsource mission-critical maintenance services to meet efficiency standards and targeted operating ratios, adding Ferrovia’s best-in-class vegetation management capabilities to Genesis Rail’s existing services creates a unique offering within the railroad industry,” said Jeff Helminski, Auxo co-founder and managing partner. “With Genesis and Ferrovia integrated into a single platform, their full-service offerings provide our customers with a highly capable, safety-focused and cost-effective track maintenance solution.”