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Portec Rail to acquire all of Kelsan Technologies' stock


Portec Rail Products Inc. remains in acquisition mode. A month after completing a transaction to acquire all of Salient Systems Inc.'s outstanding shares for a combination of its own stock and cash, Portec Rail today announced it reached an agreement with Kelsan Technologies Corp. to purchase all of Kelsan's outstanding shares for $16.4 million.

The acquisition will expand Portec Rail's friction management capabilities and strengthen its position as rail industry supplier and service provider, according to a prepared statement. The company supplies rail joints and anchors, spikes, friction-management products and systems, and load securement devices.

Canadian supplier Kelsan markets friction-control products to the railroad industry. The products are designed to extend rail and wheel life, improve fuel efficiency, and reduce greenhouse gas emissions, noise and lateral forces. About 70 percent of Kelsan's fiscal-year 2004 sales came from customers outside North America.

"We have had a technical alliance with Kelsan and we have been working as a distributor of Kelsan's friction modification products for many years," said Portec Rail President and Chief Executive Officer John Cooper. "The combination gives us the ability to optimize the use of our engineering, research and development, and global sales and marketing resources."

Portec Rail and Kelsan officials expect the transaction — which is subject to Kelsan shareholder approval — to close in late November or early December.