INDUSTRY: 'The acquisition of Faiveley Transport is an excellent strategic fit, expanding our geographic presence, broadening our product and service capabilities, and strengthening our technology and innovation initiatives', said Wabtec Executive Chairman Albert J Neupaver on November 30, when the US-based group completed its purchase of the Faiveley family's 51% stake in Faiveley Transport.
'The combination of two rail industry leaders creates compelling growth opportunities and synergies, and strengthens the diversity of our revenue base’, he said. ‘We are pleased to welcome the Faiveley family as long-term Wabtec shareholders with representation on our board of directors.'
The Faiveley family stake was acquired for US$212m in cash and 6·3 million shares of Wabtec common stock. Wabtec is to launch a tender offer for the remaining public shares in December and expects to complete it in early 2017. Faiveley Transport shareholders will have the option of receiving €100 or 1·1538 Wabtec common shares per share.
The total purchase price for 100% of Faiveley Transport is US$1·7bn. The US$1·2bn cash portion will be funded from US$325m of cash on hand, the proceeds of a recent US$750m senior notes offering and the company's existing revolving credit facility and term note.
Wabtec President & CEO Raymond T Betler said the acquisition provided Wabtec with 'many complementary products, a strong presence in the European and Asia Pacific transit industries, and solid relationships with blue-chip, global customers'.
Wabtec expects the combined business to have revenues of US$4·2bn in 2017, and the transaction to be accretive to earnings per diluted share in 2017. It expects at least US$50m in annual synergies from the merger by year three, following restructuring and one-time costs.
Wabtec's Transit Group which is responsible for worldwide passenger-sector activities will operate under the Faiveley Transport brand, with its headquarters in Paris. Faiveley Transport Chairman & CEO Stéphane Rambaud-Measson becomes President & CEO of the Transit Group and a corporate Executive Vice-President, reporting to Betler. 'The passenger transit business typically provides a steady flow of new projects and aftermarket growth opportunities, and we are well positioned in key global markets such as Europe and Asia Pacific', said Rambaud-Measson.