WABTEC has signed a definitive agreement to acquire United States-based rail services and equipment supplier Nordco for $US 400m from Greenbriar Equity. The acquisition has already received regulatory approval and is subject to customary closing conditions.
Nordco supplies a selection of rail products and services to build, improve, maintain and inspect track and reposition rolling stock, including a range of new, rebuilt and used track maintenance equipment including mobile railcar movers and ultrasonic rail flaw detection technologies.
Nordco has sites in Illinois, Connecticut and Missouri, and is expected to report full-year sales of more than $US 175m for 2021, alongside an Ebitda of $US 40m. The company’s existing clients include a range of North American Class 1 railways, short lines, transit authorities, equipment leasing companies and leading industrial customers.
The company will join Wabtec as part of its Freight Services group and is expected offer immediate accretive growth for Wabtec’s Ebitda margin, EPS and cash flow in 2021 after adjusting for one-time costs.
“This deal will significantly increase our presence in the maintenance of way segment and give us a strong position in the growing railcar mover market,” says Mr Pascal Schweitzer, president of Wabtec’s Freight Services group. “Our combination provides an attractive offer for customers and opens further opportunities for international expansion.”
Wabtec says that the acquisition will expand its existing base and accelerate growth across Nordco’s product portfolio both domestically and internationally, as well as driving increased value creation for customers and shareholders.
“Nordco is a strategic addition to the Wabtec portfolio with an attractive pipeline of vertical solutions and strong aftermarket demand that will only be strengthened by our vast global footprint,” says Mr Rafael Santana, Wabtec’s president and CEO. “This acquisition aligns with our growth strategy, is supported by a strong recurring revenue model, technology that complements our business, and is projected to deliver over $US 10m in cost synergies for our shareholders over the next three years.”
