Private investment firm Auxo Investment Partners has acquired Genesis Rail Services, a full-service US railroad maintenance company.
As part of the transaction, 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. In addition, railroad industry veteran John McPherson will serve as Auxo’s operating partner and a board member.
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.
The investment marks Auxo’s first foray into the rail services industry – which is projected to grow significantly in the coming years, driven by positive macro-economic trends for rail, the restocking of depleted inventories and a tight trucking market with expectations of long-term driver shortages. The increased freight volume, led by the growth of intermodal freight, is expected to cause additional wear-and-tear on tracks, leading to increased demand for reliable and cost-effective rail maintenance.
“Given strong industry tailwinds and our company’s history of success, Auxo’s hands-on operational approach and impressive resources come at a perfect time,” says Cody Harman, who has managed the company’s day-to-day operations since 2017. “It was important to find a trustworthy partner who was extraordinarily knowledgeable about the railroad industry. With Auxo as a partner, our goal is to eventually provide maintenance of way and mechanical services to every Class I and Class II railroad in the country by growing and expanding our current offerings.”
According to John McPherson who has held executive-level positions at some of the country’s largest railroads: “Market trends are moving in a direction that make Genesis’ value proposition all the more compelling as rail companies increasingly seek cost-effective solutions to their expanding maintenance needs. Having worked in the sector for more than 50 years, the company is in a unique position to scale its operations and serve the market in an unprecedented way.”
