Wabtec (a Pittsburgh, Penn. firm) announced today it has acquired Relco Locomotives, a long-established player in the locomotive overhaul and maintenance industry. The acquisition expands Wabtec’s freight services capabilities and capacity to support growth in the remanufacturing and repair business.
Relco has plants in the Chicago area and in Albia.
“This acquisition will unlock tremendous value for our customers, employees and shareholders,” said Rafael Santana, Wabtec President and CEO. “The complementary combination of our portfolios will create aftermarket services growth and the development of new, innovative solutions to drive improved asset utilization and reduced operating cost for customers.”
Pascal Schweitzer, Wabtec’s Group President, Freight Global Services Organization, added: “Today marks an exciting day for Wabtec’s services business and will further strengthen our portfolio. By leveraging Wabtec’s robust remote monitoring and diagnostics and predictive maintenance capabilities, as well as our focus on lean continuous improvement, we will build upon RELCO’s deep product offering, track record of service quality and engineering creativity for locomotive modernizations. We are excited about the long-term opportunities before us and are pleased to welcome Mark Bachman and the Relco team to the Wabtec family.”
“The combination of our teams is an excellent fit,” said Mark Bachman, Chief Operating Officer of Relco. “Our combined companies share a common culture and values rooted in innovation, collaboration, inclusiveness and continuous improvement. Together, we will expand our reach, strengthen our market capabilities and better serve the rail industry.”
Financial Terms of Transaction
The purchase price for the transaction was $29 million, on a cash-free and debt-free basis. All conditions for the acquisition are complete and the transaction will be accretive in year 1. Relco’s projected sales for 2019 are roughly $50 million.