Railroad company Genesee & Wyoming said it would buy Providence and Worcester Railroad Company for about $126 million, or $25 a share, in a deal to expand its northeast routes.

The deal is a 53% premium over Providence's Friday closing price of $16.30.

Providence provides rail service in Rhode Island, Massachusetts, Connecticut and New York across 163 miles of owned track and about 350 miles under track-access agreements. It services aggregates, auto, chemicals, metals and lumber customers in southeastern New England, and handles about 43,000 carloads and intermodal units annually.

The deal is subject to closing conditions and approval by the Surface Transportation Board. It is expected to add $35 million of revenue in the first year. The deal is being funded by Genesee's revolving credit facility.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

August 15, 2016 09:45 ET (13:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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