Phoenix Rail, a joint venture of infrastructure manager Ancala and rail investment and management firm Arkadia Rail Partners (formerly Brookhaven Capital Partners), has completed acquisition of Lehigh Valley Rail Management LLC (LVRM), an owner/operator of short line and intermodal terminal infrastructure in Pennsylvania. The transaction marks Ancala’s second infrastructure investment in North America, following the acquisition of Noventa Energy in 2023.
LVRM, Phoenix Rail’s first acquisition, owns and operates 80 miles of short line trackage and an intermodal terminal in Pennsylvania. Short line rail operations are in Bethlehem (50 miles) and Johnstown (60 miles), with access to Norfolk Southern, CSX and CPKC. The intermodal terminal is in Bethlehem. LVRM also provides railcar storage, SIT (storage in transit) and transloading services at both locations.
Phoenix Rail’s management team, which the company says has “proven capabilities in growing and improving short line rail businesses during three decades,” includes CEO Alex Yeros, COO Ross Grantham, CFO Jack Sullan and Chief Strategy Officer Jim Crawford. Most recently, Arkadia acquired Pioneer Lines, a short line holding company with 15 railroads across the U.S. Arkadia noted in “transformed Pioneer Lines into a high performing organization, improving its freight volumes and infrastructure, as well as its safety and financial performance, before selling the business in 2022.” Prior to Pioneer Lines. Arkadia was involved in establishing, managing and growing OmniTRAX.
Ancala said it “has a significant controlling stake in the business and will work alongside the Arkadia team to build the Phoenix Rail platform into a best-in-class owner and operator of railroads and rail-related businesses. The partnership aims to execute a comprehensive acquisition strategy, leveraging Arkadia’s industry relationships and collaborating with legacy rail owners to monetize and transition their businesses effectively. Phoenix Rail will unlock growth in owned assets by investing in infrastructure, expanding existing and developing new customer relationships, and pursuing adjacent business opportunities.”
“We intend to leverage our industry experience to acquire, grow and enhance this platform across the U.S.,” said Yeros. “LVRM is an attractive initial investment with clear opportunities to build on customer and industry relationships, enhance services and invest for growth. We are grateful to the owners of LVRM who entrusted us with taking their company and their legacy into its next chapter. Ancala has been an invaluable partner already through this process and is the ideal investor with whom to partner with to support our team’s vision for growth. Ancala’s experience of growing platforms, its availability of capital, and asset management expertise, paired with our proven experience of growing short line rail companies, provides Phoenix Rail with a robust foundation to build the platform.”
“Short line rail in North America is a resilient and highly fragmented market with significant opportunities to grow,” said Ancala Partner Lee Mellor. “Partnering with Alex and his proven management team is an exciting opportunity to deploy additional capital and build a significant rail business in the U.S. “LVRM’s assets in Bethlehem and Johnstown are critical nodes on the U.S. rail network and serve the densely populated Northeast with around 17% of the U.S. population living within a day’s drive. We look forward to working with Alex and the team to grow LVRM and pursue further opportunities through Phoenix.”
