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Wabtec Corp. announced today it has signed a definitive agreement to acquire Nordco Inc. from Greenbrier Equity Group LP for $400 million in cash.
Based in Wisconsin, Nordco is a supplier of rebuilt and used maintenance-of-way (MOW) equipment with a product and service portfolio that includes mobile rail-car movers and ultrasonic rail-flaw detection technologies.
The acquisition has received necessary regulatory approvals and is subject to customary closing conditions, Wabtec officials said in a press release.
In recent years, Greenbrier worked with Nordco to invest in innovation, new product development and customer relationships, helping to create a leader in rail MOW equipment, products and services. The acquisition will enable Wabtec to accelerate its long-term growth strategy, said Pascal Schweitzer, president of Wabtec's freight services group. Nordco will become part of this group.
"This deal will significantly increase our presence in the maintenance-of-way segment and give us a strong position in the growing rail-car mover market," Schweitzer said. "Our combination provides an attractive offer for customers and opens further opportunities for international expansion."
Nordco is expected to have full-year 2021 sales of more than $175 million. Wabtec is financing the acquisition through cash on hand and a revolving credit facility. Wabtec officials expect Nordco to be immediately accretive to EBITDA margin, earnings-per-share and cash flow in 2021 after adjusting for one-time costs.
"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 $10 million in cost synergies for our shareholders over the next three years," said Rafael Santana, Wabtec president and chief executive officer.
Nordco's family of companies provides products and services that enable rail-related industries to build, improve, maintain and inspect their track infrastructure and reposition rolling stock. Nordco's equipment and services support North American Class Is, short lines, transit authorities, equipment leasing companies and industrial customers.
Baird served as financial adviser to Nordco. Jones Day provided legal services to Wabtec and Hughes Hubbard & Reed LLP provided legal services to Nordco.