Gateway Rail acquires storage company as it eyes expansion

May 12, 2015

Gateway Rail Services has agreed to acquire railroad storage company Granite City Passenger Terminal as Gateway tries to expand its repair business into freight cars.

The acquisition adds a 75,000-square-foot warehouse and 6,000 square feet of railcar storage to Madison, Illinois-based Gateway’s portfolio.

In the short-term, the acquisition allows Gateway, which is owned by a group of investors from across the U.S., most of them involved in the railroad industry, to offer car storage to customers. Gateway itself had used the storage facility in the past. The company’s president and general manager, Roger Verbeeren, said Gateway’s long-term plan is to outfit the warehouse facility for freight car repair.

Freight would be a newer venture for Gateway, which focuses on repairing and refurbishing passenger cars — a highly specialized and regulated industry — and building specialty railcars. To outfit the acquired facility for freight repair, Gateway would need to build infrastructure — essentially a large metal building within the facility — and add equipment and parts. All that would require an investment of around $750,000, including about $500,000 for the infrastructure, Verbeeren said.

Such an expansion could initially add about six employees to Gateway’s ranks, Verbeeren said. Currently the company has about 12 employees, down from a high of 24 before the industry took a dip following the recession, and makes slightly less than $2 million in revenue a year, he said.

Read the full story from Ben Unglesbee, Reporter for the St. Louis Business Journal by clicking here.

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