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Federal Signal to mark a deal with MRL
Posted on Wednesday, 15 May 2019 13:22
Federal Signal is snapping up US-based road-marking products manufacturer Mark Rite Lines Equipment (MRL) for USD 55.50 million.
The purchase price also includes an earn-out payment of up to USD 15.50 million, subject to certain unspecified targets being achieved.
Subject to the usual closing conditions, the transaction is expected to complete in the third quarter of 2019.
Headquartered in Montana, MRL’s products include traffic paint, line removal grooving equipment and impact attenuator trucks, among others, which utilise materials such as thermoplastic and epoxy.
It has around 250 employees and posted revenue of USD 67.00 million for the financial year ended 31st December 2018, with an earnings before interest, taxes, depreciation and amortisation (EBITDA) margin of 13.0 per cent.
As a result of the deal, Federal Signal will expand its speciality vehicle platform portfolio through the acquisition of the target’s subsidiary – Highmark Traffic Services, which provides road marking services across Montana.
Jennifer Sherman, chief executive of Federal Signal, said: “MRL gives us an opportunity to leverage our expertise in building chassis-based vehicles, apply our ethical trading initiative principles and utilise our existing distribution channels and aftermarket platform to accelerate MRL’s growth.”
The deal is expected to increase the acquiror’s non-GAAP earnings per share (EPS) in 2019 and add up to USD 0.10 in adjusted EPS by year three.
Illinois-based Federal Signal designs, makes and supplies public safety products such as warning lights and lightbars, for the governmental, industrial and commercial industries.
It has 3,300 employees with 14 manufacturing facilities worldwide and a portfolio which includes companies such as Crysteel, FS Industrial, Guzzler and Ox Bodies.
For the financial year ended 31st December 2018, the group generated net sales of USD 1.09 billion, up from USD 898.50 million in the preceding 12 months.
Within the same timeframe, the company’s adjusted EBITDA totalled USD 160.50 million (FY 2017: USD 113.50 million).
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 44 deals targeting paint and coating manufacturers announced worldwide since the beginning of 2019.
In the largest of these, Nippon Paint Holdings agreed to acquire Australia’s DuluxGroup for AUD 4.20 billion (USD 2.92 billion).
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