Federal Signal Corp. (NYSE:FSS) has agreed to acquire Truck Bodies and Equipment International (TBEI), a manufacturer of dump truck trailers, from private equity firm GenNx360 Capital Partners for $270 million. The deal follows the target’s add-on acquisition of Travis Body & Trailer Inc. to expand in the southwest U.S.
TBEI makes aluminum truck bodies and equipment using a variety of brands, including: Crysteel, Ox Bodies, Rugby, DuraClass, J-Craft and Travis Body and Trailer. The Minnesota-based target was acquired by GenNX360 in September 2015. Federal Signal’s acquisition of TBEI is expected to accelerate the company’s mix of revenue streams between municipal and industrial clients. Harris Williams & Co. is serving as adviser to TBEI.
“This acquisition is consistent with our disciplined capital deployment strategy, which targets the acquisition of high performing businesses that grow and compound our cash flow,” states Federal Signal CEO Jennifer Sherman.
Federal Signal produces safety, signaling and communications equipment, environmental vehicles and machinery components. As part of the deal, TBEI will join the buyer’s environmental services group to form a single division supplying maintenance and infrastructure equipment.
GenNx360, headquartered in New York, is a private equity firm that focus on investing in industrial middle-market companies. The firm invests in the industrial machinery, components, oil and gas, transportation, logistics, agricultural, chemicals and aerospace sectors. GenNx’s current investments include Appalachian Railcar Services, Syncreon, Midwest Can and Container Specialities, and Novel Ingredient Services.
The manufacturing industry is ripe for M&A and is continuing to rise, mainly due to advancements in process automation and the automobile industry. These innovations are of interest to dealmakers as they look to purchase manufacturing companies that will be of interest to the largest transportation companies or private equity firms in the future. Recent acquisitions involving trucking and auto parts suppliers include: Accuride Corp.’s (NYSE: ACW) purchase of parts manufacturer KIC LLC; Monroe Truck Equipment Inc.’s acquisition of equipment maker Towmaster Inc.; W.W. Williams Co. LLC’s buying of parts provider Auto Safety House LLC; Tesla Motors Inc.’s adding SolarCity Corp. in a $2 billion transaction; Illinois Tool Works Inc.’s (NYSE: ITW) completed the transaction for ZF Friedrichshafen AG’s engineered fasteners and components business; Grakon LLC’s adding lighting and electronics manufacturer Hamsar Diversco Inc.; Rev Group’s (NYSE: REVG) deal for Midwest Automotive Designs; and Watermill Group’s acquisition of metal parts maker Experi-Metal Inc.