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2/12/2003



Rail News: Rail Industry Trends

Try, try again: Global Railway renegotiates deal to acquire G&B Specialties


For the second time in a little more than a year, Global Railway Industries Ltd. has reached an agreement to acquire G&B Specialties Inc., which supplies track switch layouts and other switching materials.


On Feb. 12, Global Railway announced plans to purchase G&B Specialties for $7 million and enter into a three-year, $2.5 million management contract with the Berwick, Pa., supplier's vendors. The companies expect to close the transaction in March.


"We are very pleased to have renegotiated a deal that makes sense for both Global and the vendors," said Global Railway President Mike Kohut in a prepared statement. "Other factors have made this transaction more economical than it was this time last year, such as the stronger Canadian dollar in relation to the U.S dollar and Global's reduced cost of capital."


In November 2001, Global Railway and G&B Specialties reached a purchase agreement, but the deal was called off in May 2002 because Global Railway officials believed due diligence results weren't in line with expectations and the company wouldn't support G&B Specialties' original $11 million offering price.


A supplier of various railway equipment, Calgary, Alberta-based Global Railway owns Rafna Industries Ltd. and Bach-Simpson Corp., and in October acquired rail-car door and replacement part supplier Prime Steel Inc. The company plans to purchase other rail-equipment manufacturers as part of a long-term strategy, Global Railway officials said.


Contact Progressive Railroading editorial staff.

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