Calgary-based Global Railway Industries Ltd. has agreed to buy an American railway equipment supplier for $11-million US.
The company (GBI-TSE) announced last week it has agreed to buy G&B Specialties Inc. of Berwick, Penn. Global will pay $11 million in cash plus an additional $1 million under an ‘earn-out’ provision that is contingent on G&B’s future incremental revenue.
The agreement, which takes effect in January, also requires G&B to guarantee $3 million US of working capital and for the company to be completely debt-free at the time the deal is closed.
G&B has manufactured a variety of railway forgings, precision-machined parts and fabrications for the railway industry since 1979. The company generated revenues of $11 million US during its last fiscal year. Operating from an 80,000-sq.-ft. manufacturing plant, it has about 120 staff.
“Financially, this acquisition will increase Global Railways’ annual revenue base by over 100 per cent to approximately $30 million going forward, and it will be immediately accretive to the company’s overall bottom line," said Global president Mike Kohut.
Web Watch:
www.globalrailway.com
