Wabtec Corporation has signed a definitive agreement to acquire Frauscher Sensor Technology Group for €675 million in cash. This acquisition will boost Wabtec’s Digital Intelligence business and enable it to expand in the rail signalling sector. This will benefit the company by expanding their business in Europe and India, reinforce continuous growth, innovation, and operational efficiency.

Introduction:

Wabtec Corporation, a prominent leader in rail technology and digital solutions, has announced a definitive agreement to acquire Frauscher Sensor Technology Group GmbH, a popular name in train detection, axle counting systems, and wayside object control solutions. The acquisition is valued at €675 million in cash.

Wabtec will benefit immensely by this acquisition as it will help the company in expanding railway signalling and digital intelligence sectors. It is poised to accelerate shareholder value by being accretive to adjusted EPS, EBIT margins, and Return on Invested Capital (ROIC) starting from the first year of the deal.

Key Highlights of the Acquisition:

Strategic Advantages for Wabtec:

About the Companies:

Wabtec Corporation:

Wabtec is a prominent company with 155 years of industrial experience under its belt, providing advanced systems, modern equipment and services in both the transit rail and freight sector. It has an impeccable portfolio as it has always focused on sustainable development and digital transformation initiatives in the railway sector.

Frauscher Sensor Technology:

Frauscher Sensor, a recognised company known for innovation in axle counting and wheel detection, supports rail operators and integrators across product life cycles and has made a robust global presence with strong supply chain and support networks.

Insight:

Wabtec President and CEO Rafael Santana said, “This strategic acquisition enhances Wabtec’s current Digital Intelligence portfolio, our opportunities in a high potential market, and aligns with our Company’s long-term growth strategy. Frauscher has an industry leading portfolio that offers a rare combination of innovative technology, sustained growth, and strong and resilient profitability.”

Nalin Jain, President of Wabtec’s Digital Intelligence Group said, “Frauscher is a strong addition to the Digital Intelligence business, with a complementary product portfolio that supports our vision of maximizing the safety, efficiency, and capacity of the global rail network. By combining our businesses, we will be able to deliver safety-critical insights through customized systems combining sensors with software and analytics, along with a comprehensive lifecycle services suite. Given Frauscher’s significant presence in Europe and India, this acquisition will further strengthen our international growth strategy in these large markets.”

Conclusion:

The acquisition of Frauscher marks a major milestone for Wabtec as it can expand in digital rail signalling sector across the world. With Frauscher’s strong technological ground and global market presence Wabtec will be benefited as it will improve rail safety, efficiency, and innovation in the transport sector.

Source: Wabtec – Press Release | Image Credit: Wabtec

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