Shortly After Announcing Acquisition of Evident’s Inspection Technology Division, Wabtec Announces Acquisition of Frauscher Sensor Technology Group
Written by David C. Lester, Editor-in-Chief
PITTSBURGH –– Less than a week after announcing the acquisition of Evident's Inspection Technlogy Division, Wabtec this week announced the company's acquisition of Frauscher Sensor Technology Group.
You can read about last week’s acquisition here.
Wabtec Corporation announced this week that it will acquire agreement to acquire Frauscher Sensor Technology Group GmbH (“Frauscher”), “a global market leader in train detection, wayside object control solutions and axle counting systems. The acquisition positions Wabtec for accelerated, profitable growth, and further strengthens the Company’s Digital Intelligence business by adding highly attractive and complementary railway signaling technologies.”
Wabtec’s President and CEO, Rafael Santana, said “This strategic acquisition enhances Wabtec’s current Digital Intelligence portfolio, our opportunities in a high potential market, and aligns with our Company’s long-term growth strategy. “Frauscher has an industry leading portfolio that offers a rare combination of innovative technology, sustained growth, and strong and resilient profitability.”
Wabtec is acquiring the company for $792 million in cash and according to a press release, the acquisition is “anticipated to provide immediate shareholder value with an accretive growth profile, accretive Adjusted EBIT margins, accretive Adjusted EPS in the first year of ownership, and accretive return on invested capital (ROIC) over time. The purchase price reflects an estimated multiple of 12.4x projected 2025 EBITDA adjusted for projected run-rate cost synergies which Wabtec expects to be realized over a three-year period. Frauscher is expected to generate approximately $170 million of revenue in 2025 and expected growth will exceed Wabtec’s average growth over the next five years. The transaction is subject to customary closing conditions and regulatory approvals.”
According to Nalin Jain, President of Wabtec’s Digital Intelligence Group, “Frauscher is a strong addition to the Digital Intelligence business, with a complimentary product portfolio that supports our vision for maximizing the safety, efficiency, and capacity of the global rail network. By combining our businesses, we will be able to deliver safety-critical insights through customized systems combining sensors with software and analytics, along with a comprehensive lifecycle services suite. Given Frauscher’s significant presence in Europe and India, this acquisition will further strengthen our international growth strategy in these large markets.”
Wabtec’s acquisition of Frauscher will also enable Wabtec to gain a stronger prescence in the railway signaling market.
