Tuesday, January 17, 2012

Faiveley Transport buys into Graham-White

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Faiveley Transport says it has signed an agreement to acquire a controlling interest in Graham‐White, a designer and manufacturer of compressed air drying technology and brake components for locomotives and rail transit markets.

Salem, Va.-based Graham‐White employs 300 people and operates six facilities across the U.S., with a central manufacturing site located in its home town. Graham‐White annual sales are anticipated at $70 million in 2011, of which 90% are generated in the U.S.; a large share of revenue comes from after market and re‐manufacturing.

Faveley Transport logoFaiveley Transport already is the primary licensee for Graham‐White’s air dryers in India. The transaction is expected to enhance Faiveley Transport’s position in the U.S., notably in the locomotive market and customer services.

“I am very pleased to welcome Graham‐White into the Faiveley Transport group. Graham‐White will reinforce our commitment to North American original equipment manufacturers and rail operators, which is fully in line with our strategic focus on the US. The companies have similar cultures, and have already worked together successfully in the past, which will help to make it a very compelling combination” said Thierry Barel, CEO of Faiveley Transport.

“The new organization will create considerable cross selling opportunities that will benefit Graham‐White and our customers; we will be well positioned for the locomotive and transit industry in the US and worldwide” said Jim Frantz, president and CEO of Graham White.

Frantz will remain in his position at Graham‐White and will also lead the newly formed Faiveley Transport North America organization.

The transaction is expected to be closed in the first quarter of this year, and will be funded mainly through Faiveley Transport’s credit lines and partially through an issue of new shares to the sellers (issue of approximately $15 million or 1.7% of capital). The transaction should have an accretive impact on Faiveley Transport’s earnings per share as of the 2012/13 financial year, Faiveley Transport said.