Federal Signal Corporation (NYSE:FSS) has signed a definitive agreement to acquire Truck Bodies and Equipment International (“TBEI”).
TBEI has portfolio of truck body and trailer manufacturers that includes Crysteel Manufacturing, DuraClass, J-Craft, Ox Bodies, Rugby Manufacturing, and Travis Body & Trailer. Federal Signal said it is buying the company for $270 million, subject to post-closing adjustments. The price represents a multiple of 7.2x TBEI’s EBITDA for the twelve-month period ending March 31.
Federal Signal acquired TBEI from GenNx360 Capital Partners, a New York-based private equity firm.
TBEI is expected to be combined with the businesses within Federal Signal’s Environmental Solutions Group (“ESG”) to create a single platform providing municipal and industrial customers with a suite of maintenance and infrastructure equipment.
The company intends to fund the acquisition through a combination of available cash and borrowings available under its existing credit agreement. Upon closing, the Company anticipates a debt to EBITDA ratio of approximately 2.7x.
During the twelve-month period ending March 31, 2017, TBEI generated revenues of $206 million and an EBITDA margin of approximately 18%. TBEI operates five manufacturing facilities throughout the U.S. and employs approximately 850 people.
Robert Fines, TBEI’s president and chief executive officer, will be joining Federal Signal’s management team.
Pending customary closing conditions and regulatory approvals, the transaction is expected to close within the next 90 days. Federal Signal conducted a conference call to discuss the transaction. The call may be accessed through Federal Signal’s website at www.federalsignal.com.
TBEI generated revenues of $206 million and an EBITDA margin of approximately 18% during the past 12 months ending March 31.
GenNx360 acquired TBEI in September 2015. During the investment period, the strategic acquisition of Travis Body and Trailer further strengthened TBEI's brand providing expertise in aluminum dump trailers and dump bodies, expansion into the Southwest, and a strong and loyal dealer network.