“The GE Story Picks Up Steam With Wabtec Deal”
Wabtec Corporation is a leading global provider of equipment, systems and value-added services for transit and freight rail. Through its subsidiaries, the company manufactures a range of products for locomotives, freight cars, and passenger transit vehicles. The company also builds new switcher and commuter locomotives and provides aftermarket services. The company has roughly 18,000 employees and facilities located throughout the world. For the fiscal year ending December 31, 2017, Wabtec generated approximately $3.9 billion in revenue and $504 million in adjusted EBIT (approximately 13% margin).
GE Transportation helps move the world and improve the world, as a global technology leader and supplier of equipment, services and digital solutions to the rail, mining, marine, stationary power and drilling industries. GE Transportation’s innovations help customers deliver goods and services with greater speed and savings using advanced manufacturing techniques and connected machines. The company employs approximately 9,000 employees worldwide. GE Transportation has a backlog of roughly $18 billion, including approximately 1,800 new locomotives and roughly 1,000 locomotive modernized units. For the fiscal year ending December 31, 2017, GE Transportation generated approximately $3.9 billion in revenue and $701 million in adjusted EBIT (approximately 18% margin).
According to an Associated Press release, Dow 30 component General Electric (GE) is tieing its train engine division with Wabtec in a deal that is worth more than $11B that is expected to close early 2019. Wabtec CEO Raymond Betler will lead the combined company that combined will have more than 23,000 locomotives. Following the transaction, Wabtec will also have approximately $8 billion in revenues, a more diversified business mix, higher margins, and approximately 15 percent cash EPS accretion in year one. the deal is approved by the Boards of Directors of Wabtec and GE. GE and its shareholders will receive a 50.1% ownership interest in the combined company.
GE shares are trading at $15.43 up 3.07% currently.
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