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Global Railway to soon acquire its second railroad-equipment supplier

Global Railway Industries Ltd. Nov. 13 signed a binding letter of intent to purchase track-switching product supplier G&B Specialties Inc.

Global Railway — a railway product and service provider — agreed to buy G&B for $11 million cash, with a $1 million earn-out provision contingent on G&B's future incremental revenue.

A key closing condition would require G&B to guarantee $3 million in working capital and be completely debt free; the transaction is expected to close Jan. 30.

Berwick, Pa.-based G&B operates an 80,000 square-foot manufacturing facility with 120 non-union employees.

Global Railway officials believe the acquisition would provide the company a strong U.S. manufacturing base and more than double its annual revenue to $30 million.

In July, Global Railway acquired railroad instrumentation and electronic monitoring equipment manufacturer Bach-Simpson Corp. for $2.2 million cash.

"As a result of acquisitions in 2001, Global Railway will be in a position to increase its annual revenue base and profit potential three to four times in 2002," said Global Railway President Mike Kohut in a prepared statement.

Contact Progressive Railroading editorial staff.

More News from 11/13/2001