Wabtec to tap credit facilities to partly fund Faiveley acquisition

By Wendy Van Sickle

Columbus, Ohio, July 27 – Wabtec Corp. plans to draw from its existing credit facilities to fund part of its $1.8 billion acquisition of Faiveley Transport SA, according to a news release.

The transaction is set to take place in three steps:

• Wabtec will buy approximately 51% of Faiveley’s shares for €100 per share, payable 25% in cash and 75% in Wabtec preferred stock. The preferred stock will have a 1% annual dividend or, if greater, the dividend assuming full conversion into common shares, and must be converted after three years into Wabtec common shares at an implied ratio of one Faiveley Transport common share for 1.125 Wabtec common shares.

• After required labor group consultations, Wabtec said it expects the 51% shareholders to enter into a definitive share purchase agreement, and Faiveley Transport will enter into a transaction agreement with Wabtec.

• Upon completing the share purchase, Wabtec will commence a tender offer for the remaining publicly traded Faiveley Transport shares. The public shareholders will have the option to elect to receive €100 per share or Wabtec preferred stock.

Wabtec said that, in addition to its existing credit facilities, it will also use cash on hand and possibly other sources to finance the $1.8 billion total price tag, which includes assumed debt.

Following the acquisition, Faiveley’s headquarters in Gennevilliers, France, will become Wabtec’s global transit headquarters.

Faiveley is a provider of integrated systems and services for the railway industry.

Wabtec is a Wilmerding, Pa.-based maker of railroad equipment.

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