Wabtec and Greenbriar Equity Group have signed a definitive agreement to acquire Nordco, a leading North American company which provides an extensive selection of products and services that make it possible for rail-related industries to build, improve, maintain and inspect their track infrastructure and reposition rolling stock. The acquisition has received necessary regulatory approvals and is subject to customary closing conditions.
Under the acquisition, Wabtec will pay USD 400 million in cash, financed through cash on hand and a revolving credit facility.
Wabtec expects Nordco to be immediately accretive to EBITDA margin, EPS and cash flow in 2021 after adjusting for one-time costs. The company is expected to have full year 2021 sales of more than USD 175 million and EBITDA of about USD 40 million and will join Wabtec as part of its Freight Services group.
In recent years, Greenbriar partnered with Nordco to invest in innovation, new product development and customer relationships, helping create a leader in rail maintenance of way equipment, products and services.
Through the acquisition, Wabtec will expand its installed base and accelerate growth across Nordco’s innovative product portfolio both domestically and internationally, while driving increased value creation for customers and shareholders.
“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 USD 10 million in cost synergies for our shareholders over the next three years,” Rafael Santana, the CEO of Wabtec said.
Nordco is a supplier of new, rebuilt and used maintenance of way equipment with a broad product and service portfolio including mobile railcar movers and ultrasonic rail flaw detection technologies. Nordco’s equipment and services support the North American Class I railways, short-line and transit authorities, equipment leasing companies and leading industrial customers. The company also serves industries that rely heavily on rail transport, including port authorities, agriculture, mining, chemicals and energy.