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Federal Signal Closes CDN 108m Acquisition of Joe Johnson Equipment.


6 June 2016 - US-based environmental and safety solutions company Federal Signal Corp. (NYSE: FSS) has closed the acquisition of substantially all of the assets and operations of Canadian maintenance equipment distributor Joe Johnson Equipment for initial consideration of CDN 108m (USD 79m), subject to post-closing adjustments, the company said.

Joe Johnson Equipment serves municipal and industrial markets.

In addition, there is a deferred payment of CDN 8m and a contingent earn-out payment of up to CDN 10m. The transaction is expected to close by the end of 2Q16.

The company is also in discussions regarding potential acquisition of JJE's interests in Chile, which is not expected to be material.

JJE's revenues in North America were approximately CDN 154m (USD 112m) during the fiscal year ending August 31, 2015.

The company specialises in serving municipalities, municipal contractors and industrial contractors with high-quality products that include street sweepers, sewer cleaners, vacuum trucks, snow removal equipment and refuse collection equipment.

JJE represents brands that include Federal Signal's Elgin, Vactor, Guzzler and Jetstream lines, as well as Labrie, Trackless, Envirosight, NewWay, Epoke and others.

The company will operate as part of Federal Signal's Environmental Solutions Group.

Federal Signal expects the acquisition to be modestly accretive to the company's non-GAAP, adjusted earnings per share in 2016, after excluding acquisition-related effects.

The acquisition is also likely to result in changes in the timing of revenue and profit recognition that should normalise over a period of about three years. The company expects the acquisition to be accretive, on an annual basis, by about USD 0.10 to USD 0.15 per share by the end of 2018.

Federal Signal is a global designer and manufacturer of products and total solutions that serve municipal, governmental, industrial and commercial customers.

Headquartered in Oak Brook, Ill., with manufacturing facilities worldwide, the company operates two groups: Environmental Solutions and Safety and Security Systems.

Country: Canada

Sector: Construction/Real Estate

Target: Joe Johnson Equipment

Buyer: Federal Signal Corp


Deal size in USD: 79m

Type: Corporate Acquisition

Financing: Cash

Status: Closed

Buyer advisor: , ,


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Publication:M & A Navigator
Date:Jun 6, 2016
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