Acquisition in Australia: Vossloh takes over TKL’s rail switch business
Vossloh AG signed a purchase agreement to acquire the assets of TKL Rail, the rail switch business of Thompsons Kelly & Lewis Pty Ltd. (TKL), Australia, a wholly owned subsidiary of Flowserve Corporation, on Monday this week.It was agreed not to disclose the purchase price. The transaction is still subject to approval by Vossloh AG’s Supervisory Board and a final due diligence of additional information provided by the vendor. Closing of the transaction is expected by mid-December.
In 2007, TKL is predicted to generate sales of around € 10 million with the production of switches and switch components. Possessing a market share of a good 35 percent, it is #2 in the Australian rail switch market. The company will in future operate as Vossloh Cogifer Australia. Vossloh reckons that the acquiree, after allowing for all initial consolidation effects, will already contribute to group earnings in 2008. Vossloh is assuming that the Australian switch market grows by 5 to 7 percent annually.
This Australian M&A transaction is the third within one year undertaken by Vossloh Switch Systems. It was only in the spring of 2007, with the takeover of the two US switch manufacturers Pohl Corp. and Cleveland Track Material, Inc., that Vossloh gained a foothold in the US market where it is now the third-largest supplier. On a global scale, Vossloh Switch Systems is #2.
“TKL Rail allows us to access the Australian growth market,” stated Werner Andree, Executive Board Spokesman of Vossloh AG. “Financially, there is also much in favor of this move since TKL Rail even now satisfies our exacting profitability criteria."
Werdohl, November 20, 2007
Contact:
Phoebe Kebbel
Hering Schuppener Consulting
Phone: (+49-69) 92 18 74 77
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Email: pkebbel@heringschuppener.com