Pittsburgh, Pa.-based Wabtec Corporation on Jan. 14 announced a definitive agreement to acquire Evident’s Inspection Technologies division (Inspection Technologies) for $1.78 billion. The purchase was finalized July 1.
Inspection Technologies, headquartered near Boston, Mass., is slated to bring complementary advanced automated inspection technologies for the manufacturing industries, such as metal, aerospace, transportation, power generation, and oil and gas, to Wabtec’s Digital Intelligence business for the rail, mining, and industrial sectors. It has more than 1,300 employees and is said to serve its global customer base through a geographically distributed sales force and four engineering and production facilities in North America and Japan.
Formerly part of the Scientific Solutions Division of Olympus Corporation, Inspection Technologies was “expected to achieve approximately $433 million in revenue for calendar year 2024, with EBITDA of approximately $112 million, translating to a margin of 25.9%,” Wabtec reported on Jan. 14. “Beyond its strong financial performance, Inspection Technologies adds a highly stable and predictable revenue base, bolstered by a recurring revenue stream of approximately 68%.” Inspection Technologies is slated to expand Wabtec’s Digital Intelligence business growth opportunities, “effectively doubling the size of its total addressable market (TAM) from approximately $8 billion to $16 billion, while enhancing its ability to deliver innovative solutions to a broader range of customers.”
The $1.78 billion purchase price (approximately $1.68 billion after tax benefits) was financed through a combination of cash on hand, newly issued term notes, plus term loans and short-term borrowing under Wabtec’s credit agreement, according to Wabtec. “The transaction is anticipated to provide immediate shareholder value with a high single-digit revenue growth outlook, accretive Adjusted EBIT margins and accretive return on invested capital (ROIC) over time,” the company reported July 1. “Additionally, the acquisition is projected to be slightly accretive to Adjusted EPS in the second half of 2025. The purchase price reflects an estimated multiple of 12.0x projected 2025 EBITDA adjusted for transaction and separation costs, anticipated tax benefits, and projected run-rate cost synergies of $25 million. The company intends to incorporate the revenue and EPS impact of this acquisition into its Full Year Financial Guidance during its Q2 Earnings call.”
“Today, we are a stronger company with the addition of Inspection Technologies,” Wabtec President and CEO Rafael Santana said on July 1. “The acquisition expands and strengthens our Digital Intelligence business, with advanced products and services for the Company’s rail, mining, and industrial sectors, while broadening our reach into other high-growth, high-margin end-markets. It enhances Wabtec’s existing portfolio, is accretive to key financial metrics, and aligns with the company’s long-term vision to lead the industry in innovation for our customers.”
“Inspection Technologies’ product portfolio strongly complements our existing digital technologies, while adding advanced automated inspection capabilities in a space where data acquisition, analytics, and automation are critical,” said Nalin Jain, President of Wabtec’s Digital Intelligence Group, on July 1. “It will accelerate the development of scalable technologies by integrating advanced analytics, sensors, and AI technology to deliver enhanced predictive maintenance capabilities to our customers. Evident Inspection Technology employees have done a fantastic job in delivering these innovative technologies and I am looking forward to welcoming them to the Wabtec family.”
“Our deep expertise, shared commitment to innovation and strong customer relationships will unlock significant value,” noted Karen Smith, Executive Vice President of Evident Inspection Technologies, on Jan. 14. “The combination of our two skilled teams and complementary portfolios will accelerate the development of first-class, intelligent monitoring solutions to meet the changing needs of the industries we serve.”
Inspection Technologies is the fourth Wabtec acquisition since November. The company has also added Fanox, Kompozitum, and Bloom Engineering to its portfolio.
