Wabtec Corp. on Oct. 6, 2015 signed a definitive agreement with members of the Faiveley family to acquire approximately 51% of Faiveley Transport S.A., a provider of integrated systems and services for the railway industry with annual sales of about $1.2 billion. The total purchase price is about $1.8 billion, including assumed debt.
On July 27, Wabtec announced that it had made an irrevocable offer to acquire Faiveley Transport, which has completed required labor union consultations. A majority of Faiveley shareholders has accepted Wabtec’s offer.
Wabtec has also entered into a definitive tender offer agreement with Faiveley Transport and a definitive agreement with the majority shareholders of the company. Closing of the transactions is subject to various customary conditions, including completion of regulatory requirements.
Under the share purchase agreement, Wabtec plans to purchase the Faiveley shares for €100 (U.S.$113.00) per share, payable 25% in cash and 75% in Wabtec preferred stock, mandatorily convertible after three years into a total of approximately 6.5 million Wabtec common shares. Wabtec plans to fund the cash portion of the transaction with cash on hand, existing credit facilities and potentially other debt financing.
Upon completing the share purchase, Wabtec will commence a tender offer for the remaining publicly traded Faiveley Transport shares. The public shareholders will have the option to elect to receive €100 (U.S.$113.00) per share in cash or Wabtec preferred stock.
As is the case in the purchase of the Faiveley family block of shares, no more than 75% of the consideration payable to the public shareholders can be in Wabtec preferred stock.
“The strategic combination of Wabtec and Faiveley Transport will create one of the world’s largest public rail equipment companies, with revenues of about $4.5 billion and a presence in all key freight rail and passenger transit geographies worldwide,” Wabtec said.