Aug. 6--With the upheaval in the stock market over the last couple of years, there has been understandably little interest in initial public offerings. But as the market recovers, the IPO market is reviving and for the first time in almost four years, a Jacksonville-based company is planning an initial stock sale.

RailAmerica Inc. has filed a registration statement with the Securities and Exchange Commission to sell up to $300 million in stock to the public. The company, which operates 40 short-line railroads in 27 states and Canada, is currently owned by investment funds managed by Fortress Investment Group.

Fortress moved RailAmerica's headquarters from Boca Raton to Jacksonville last year after a group of Fortress funds acquired another railroad company, Florida East Coast Industries. But Jacksonville-based Florida East Coast, which owns real estate company Flagler Development Group in addition to its railroad, is operated separately from RailAmerica and is not included in the IPO.

Because of an SEC-mandated quiet period before a company sells stock, RailAmerica officials can not comment on the IPO. But Fortress CEO Wesley Edens said this week that the company is taking advantage of the stronger stock market to raise capital for businesses owned by the Fortress funds.

"If the [RailAmerica] IPO comes off as we anticipate later this year, it will be the first from one of our portfolio companies in several years, further signs of healing of the capital markets," Edens said in a conference call to discuss Fortress' second-quarter earnings.

The IPO market is heating up again, said David Menlow, president of IPO Financial Network. But Menlow, whose New Jersey firm tracks initial public offerings, said investors are still being selective about the stocks.

"The problem is finding the right deals and making sure it has the right template for investors," he said.

Menlow said he hasn't seen enough information on RailAmerica to judge whether it will be successful. But he did note that RailAmerica has a large underwriting group consisting of well-known firms: J.P. Morgan Securities Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc.

"This obviously has a good deal of interest," he said.

As a short-line company, RailAmerica operates railroads that typically carry freight from a customer's plant to a connection point with a larger railroad. According to the SEC filing, RailAmerica's 40 rail lines range in length from four track miles to 625 miles.

The company had revenue of $508.5 million and net income of $16.5 million in 2008. In the first quarter this year, it had revenue of $103.2 million and net income of $1 million.

The SEC filing does not say how many shares RailAmerica plans to sell in the IPO. It also does not say how much of the stock will be retained by the Fortress funds, and how much will be distributed to the public.

The company will apply for listing on the New York Stock Exchange under the ticker symbol "RA."

The last Jacksonville-based company to launch an IPO was Website Pros Inc., which sold 6.8 million shares at $10 each in November 2005. That company is now known as Web.com Group Inc.

mark.basch@jacksonville.com, (904) 359-4308

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