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Jacksonville-based Xorail, which produces railway signaling systems, acquired for $40 million

Reported in the Florida Times-Union, Jacksonville, Florida...........

Pennsylvania-based Wabtec Corp. (NYSE: WAB) announced Monday that it has acquired Xorail LLC, a Jacksonville-based provider of railway signaling systems, for $40 million in cash.

Xorail, formerly known as Southwest Signal Engineering Co., has 275 employees at 11 locations, including 140 workers in Jacksonville. Wabtec said it plans to retain all the Xorail employees.

“We wanted to acquire the company to grow it,” Wabtec spokesman Tim Wesley said.
Wabtec, which provides technology for the rail industry, is a publicly-traded company headquartered in Wilmerding, Pa., near Pittsburgh. It reported sales of $1.4 billion and earnings of $115 million, or $2.39 per diluted share, in 2009.

The company has about 5,000 employees at 50 global facilities.

Wabtech expects the Xorail deal to add to earnings per share in the first year.

“Xorail’s engineering and wayside capabilities are a good fit with our existing railway electronics business,” Wabtec CEO Albert Neupaver said in a news release.

“In addition, these capabilities position Wabtec for a larger role as the rail industry implements positive train control technology over the next several years,” he said.

Positive train control, or PTC, is technology designed to prevent train collisions and improve overall railroad safety.

Under a federal law signed by President Bush in 2008, the rail industry is mandated to install PTC systems by 2015.

Wesley said Xorail’s work with communications and signaling systems for PTC complements Wabtec’s work on PTC systems for locomotives.

“We view this acquisition as representative of Wabtec’s style of identifying complementary technologies to expand the portfolio and not placing a big bet on one particular trend,” Janney Montgomery Scott analyst James Lucas said in a research note Monday.

mark.basch@jacksonville.com, (904) 359-4308

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