Federal Signal Corp. signed a definitive agreement to acquire Truck Bodies and Equipment International (TBEI), a U.S. manufacturer of dump truck bodies and trailers, for $270 million.
According to Federal Signal, this acquisition will help strengthen its market position as a specialty vehicle manufacturer in maintenance and infrastructure markets. It will also allow the company to leverage its expertise in building chassis-based vehicles, expand its exposure to higher-growth industrial end-markets and balance the mix of revenues from its markets, Federal Signal adds.
As a part of the transition, TBEI is expected to be combined within Federal Signal’s Environmental Solutions Group (ESG) to create a single platform that provides its customers with a complete suite of maintenance and infrastructure equipment, as well as support solutions. According to Federal Signal, annual run-rate synergies are expected to reach between $3 and $4 million over three years.
“The TBEI business is a strong strategic fit with our ESG businesses and allows us to broaden our focus on maintenance and infrastructure markets,” says Jennifer Sherman, president and CEO of Federal Signal. “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. This acquisition is consistent with our disciplined capital deployment strategy, which targets the acquisition of high-performing businesses that grow and compound our cash flow.”
The transaction is expected to close within the next 90 days.
Federal Signal designs, manufactures and supplies products and solutions that serve municipal, governmental, industrial and commercial customers.
