News:
0 Comments Bookmark and Share

HOT TOPIC Federal Signal acquiring TBEI

OAK BROOKS, IL – Federal Signal Corporation is acquiring Truck Bodies and Equipment International (TBEI) – a maker of dump truck bodies and trailers -- for US $270 million.

TBEI runs five manufacturing facilities through the U.S., and in the year ending March 31 it generated US $206 million in revenue. The purchase price represents 7.2 times TBEI’s earnings before interest, taxes, depreciation and amortization for the same year.

The deal strengthens Federal Signal’s position as a specialty vehicle manufacturer in maintenance and infrastructure markets, according to a related announcement.  It adds to the company’s existing expertise in chassis-based vehicles.

TBEI will be combined with businesses under Federal Signal’s Environmental Solutions Group, and Federal Signal expects to realize US $3-4 million in annual synergies to be phased in over three years.

When closed the deal is expected to include a debt-to-EBITDA ratio of 2.7, but the company expects a strong cash flow from legacy businesses and TBEI will rapidly reduce the debt.

“The TBEI business is a strong strategic fit with our ESG businesses and allows us to broaden our focus on maintenance and infrastructure markets. With its large industrial customer base, TBEI will accelerate the achievement of our long-standing objective of balancing the mix of revenue streams between municipal and industrial,” said Jennifer L. Sherman, Federal Signal’s president and Chief Executive Officer.

“This acquisition also represents a significant step towards the attainment of our strategic goal of profitably growing our revenues to over $1 billion.”

Robert Fines, TBEI’s president and Chief Executive Officer, will join Federal Signal’s management team.

“There are many similarities between TBEI’s operations and those of Federal Signal and we are confident in our ability to cross-pollinate manufacturing practices, leverage our distribution networks and create a leading platform to serve the needs of our customers,” Fines said.

The deal is expected to close within 90 days, pending closing conditions and regulatory approval.

Email Editor

Filed Under:
Federal Signal TBEI Truck Bodies and Equipment International M&A