Two well-known U.S. suppliers of rail equipment will merge, as L.B. Foster said it has made a cash offer to buy outstanding shares of Portec Rail Products for $11.71 each.
The joint announcement by the companies, both based in Pittsburgh, did not specify the total value of the deal. However, Portec said in a filing with the Securities and Exchange Commission that it has 9.6 million shares outstanding, which would value the stock purchase at about $112 million.
The deal must pass a federal antitrust review, and the agreement requires at least 65 percent of Portec's outstanding shares must be tendered to Foster. The firms expect it to close before the end of June.
Stan Hasselbusch, Foster's president and CEO, said “the proposed acquisition will bring together two organizations with a rich history of successfully delivering products and services to the global rail industry.”
He said buying Portec “will complement our existing array of products, and furthers our strategic initiative of becoming a premier provider of products and services below the wheel for Class I, transit, short line and regional railroads and contractors in North America, as well as to governmental agencies and rail contractors globally."
Portec’s product list includes rail anchors, spikes, friction management devices and systems, rail joints, wayside data collection gear, plus data management and freight car securement systems. It has units in Canada and the UK as well as the United States.
L. B. Foster’s offerings not only include rail products but equipment and services for construction, energy, utility and recreation markets. Recent contracts, for instance, include supply of sheet piling to help build a dock wall at the Great Lakes port of Burns Harbor, Ind., concrete rail cross ties for a Columbia River grain terminal and steel decking for a bridge in New York City.
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