CALGARY, Nov. 13 /CNW/ - Global Railway Industries Ltd., - (TSE:GBI - news): Global Railway Industries Ltd., www.globalrailway.com, ("Global"), a provider of railway products and service equipment, announced today the signing of a binding letter of intent to acquire G&B Specialties Inc. ("G&B"). G&B manufactures track switching products for the railroad industry and is located in Berwick, Pennsylvania, USA.
The purchase price is USD $11 million payable in cash. In addition to the purchase price the Vendor can be paid up to an additional USD $1 million ("the earn out"). The earn-out provision is contingent on future incremental revenue of G&B.
Key conditions on closing require G&B to guarantee USD $3.0 million of working capital and the Company to be completely debt-free. In G&B's most recent completed fiscal year it generated revenues of USD $11 Million (approximately CAD $17 million) and EBITDA of USD $3 million (approximately CAD $4.7 million). The transaction is expected to close January 30, 2002 and will be effective from January 1, 2002. The acquisition is subject to financing arrangements, due diligence, execution of a final agreement, and regulatory approvals.
G&B Specialties, Inc., www.gandbspecialties.com, located in Berwick, Pennsylvania has been manufacturing a diversity of quality forgings, precision machined parts and fabrications for the railway industry since 1979. The Company's main product line includes track switch layouts, which it supplies to most major railroads and transit operations in North America. G&B has approximately 120 non-union employees and operates from an 80,000 square foot manufacturing facility.
Mike Kohut, President of Global Railway Industries Ltd. stated, "G&B clearly fits our acquisition criteria. First, it has a high quality, well established product line. Second, it is an efficient and innovative manufacturer. Third, G&B has a proven track record of revenue growth and profitability with significant organic growth opportunities in the near term. Fourth, G&B will provide Global Railway with a strong manufacturing base in the United States. Fifth, G&B has a strong management team with years of experience supplying the railway industry.
"Financially this acquisition will increase Global Railways' annual revenue base by over 100% to approximately $30 million going forward and it will be immediately accretive to the Company's overall bottom line," says Kohut. "As a result of acquisitions in 2001, Global Railways will be in a position to increase its annual revenue base and profit potential 3 to 4 times in 2002."
About Global Railway Industries: Global Railway Industries is a fast-growing consolidator of railway equipment manufacturers. The Company is pursuing an aggressive growth-by-acquisition strategy of industry suppliers that sell railways the equipment they need to run and maintain their operations efficiently. Global Railway Industries Ltd. is a public company whose shares are listed for trading on the Toronto Stock Exchange (TSE) under the symbol "GBI". The Company has a total of 7,205,515 fully diluted shares outstanding. For more information visit www.globalrailway.com and www.investorfile.com. |
