Wabtec Corporation (WAB) announced that it has completed the acquisition of Frauscher Sensor Technology Group GmbH (Frauscher) for an enterprise value of €675 million in cash. The purchase price marks an estimated multiple of 12.4x projected 2025 EBITDA adjusted for projected run-rate cost synergies, which Wabtec expects to be realized over three years. Frauscher is anticipated to generate approximately €145 million in revenues in 2025.
The deal was initially announced on July 7, 2025.
Founded in 1987, Frauscher is a global market leader in train detection, wayside object control solutions and axle counting systems. The company has grown to more than 700 employees located in 15 countries and has a solid presence in Europe and India. Frauscher will be integrated into Wabtec’s Digital Intelligence business.
Nalin Jain, president of Wabtec’s Digital Intelligence Group, stated, “As the world’s rail network looks to meet the ever-growing transportation demands, the combination of our digital portfolio with Frauscher’s technology will provide operators innovative solutions to optimize their operations. By combining our businesses, we will further strengthen Wabtec as an innovator in the rail industry’s digital transformation driving improved efficiency, reliability, and safety.”
How Will Wabtec Benefit?
The acquisition of Frauscher is anticipated to generate immediate shareholder value with an accretive growth profile, accretive adjusted earnings before interest and taxes margins and accretive return on invested capital over time. Further, the deal is expected to be accretive to adjusted earnings per share in the first year of ownership.
The deal widens Wabtec's Digital Intelligence portfolio and increases its business opportunities in the high-growth railway signaling market.
Rafael Santana, president and chief executive officer of Wabtec, stated, “This strategic acquisition is another step in executing Wabtec’s long-term growth strategy, which will provide enhanced value for our customers, shareholders, and employees. The rare combination of our Digital Intelligence portfolio and Frauscher’s industry leading suite of products opens opportunities in a high-potential market for sustained growth, and strong and resilient profitability.”
Wabtec currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Investors interested in the Zacks Transportation sector may also consider Expeditors International of Washington EXPD and SkyWest SKYW.
EXPD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EXPD has an expected earnings growth rate of 2.3% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 13.94%.
SKYW currently carries a Zacks Rank #2 (Buy).
SkyWest has an expected earnings growth rate of 33% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 21.24%.
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Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report Wabtec (WAB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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