Myles Group sells Marcellus railroad stake for $18M

An Exton company that made a killing hauling frack sand for natural gas drilling has sold a majority interest in its Marcellus Shale railroad.

The Myles Group of Exton sold a 70 percent interest in the Wellsboro & Corning Railroad for $18 million to RailAmerica Inc., of Jacksonville, Fla. The deal, announced Wednesday, also includes a 70 percent interest in the Industrial Waste Group, a company that transloads and stores freight, including the sand hauled by the railroad.

The Myles family will retain a 30 percent interest in the companies and continue in senior leadership roles, according to the announcement by RailAmerica, a publicly traded company that owns 43 short-line railroads in 27 states. The transaction is expected to close in the second quarter.

A.T. "Tom" Myles, a fourth-generation railroader, bought the 38-mile short line that operates between Wellsboro, Pa., and Corning, N.Y., in 2007, expecting to focus on hauling timber.

After the natural gas boom took off, so did the business of hauling sand used in the hydraulic-fracturing process.

In an interview in 2010, Myles said his family - he operates the company with sons Tom and William - had invested $1.1 million in the railroad, mostly for the aging locomotives and railcars.

The tracks are owned by Growth Resources of Wellsboro, an industrial-development foundation that bought the railroad in 1992 from Conrail, which was abandoning service on the line. Wellsboro officials wanted to maintain the rail service to retain its primary customer, a lightbulb factory in Wellsboro.EndText