Pittsburgh-headquartered rail technology provider Wabtec (NYSE: WAB) is acquiring Nordco, which supplies new, rebuilt and used maintenance-of-way equipment. Nordco, which had belonged to parent company Greenbriar Equity Group, also offers mobile railcar movers and ultrasonic rail flaw detection technologies.
The acquisition, worth $400 million in cash, has been finalized and received regulatory approvals, and the deal should close in the coming weeks, according to Pascal Schweitzer, vice president of services for Wabtec. Schweitzer is also president of Wabtec’s Freight Services group, which Nordco will integrate into following the acquisition.
Wabtec’s acquisition of Nordco comes at a time when freight traffic is increasing and there is a focus on improving velocity and ensuring safety, Schweitzer told FreightWaves. This focus makes maintenance-of-way activities increasingly critical, and Wabtec has identified maintenance-of-way technology as a company priority and a way to position Wabtec into the growing railcar mover market, he said.
“We complement each other very well and we put a lot of focus on growth, both domestically and internationally,” Schweitzer said.
The acquisition will provide Nordco’s offerings international exposure as Wabtec markets not only in North America but also in locations such as Brazil, Australia, Russia, the Commonwealth of Independent States and India, Schweitzer said.
Wabtec will combine the engineering expertise of both companies, he said.
Nordco provides an extensive selection of products and services that enable rail-related industries to build, improve, maintain and inspect their track infrastructure and reposition rolling stock, Wabtec noted. Nordco’s equipment and services support the North American Class I railroads, short-line and transit authorities, equipment leasing companies, and leading industrial customers, according to a company release on the acquisition.
Schweitzer said this is the third-largest acquisition for Wabtec. Nordco is expected to have full-year 2021 sales of more than $175 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of about $40 million.
“Nordco is a strategic addition to the Wabtec portfolio with an attractive pipeline of vertical solutions and strong aftermarket demand that will only be strengthened by our vast global footprint,” Wabtec CEO Rafael Santana said in a release. “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.”
Baird served as financial adviser to Nordco. Jones Day provided legal services to Wabtec, while Hughes Hubbard & Reed provided legal services to Nordco, according to Wabtec.
Nordco has offices and operations in Oak Creek, Wisconsin; Arcola, Illinois; Kansas City, Missouri; and Beacon Falls, Connecticut.