Wabtec to Acquire Inspection Technologies Division from Evident
Wabtec Corporation (NYSE: WAB) has announced a definitive agreement to acquire Evident’s Inspection Technologies division, a move that will significantly bolster its capabilities and market presence. Inspection Technologies, formerly part of the Scientific Solutions Division of Olympus Corporation, is a recognized global leader in Non-Destructive Testing (NDT), Remote Visual Inspection (RVI), and Analytical Instruments solutions for mission-critical assets. Known for its industry-leading brands and reference-standard technologies, the acquisition is set to enhance Wabtec’s Digital Intelligence business. The strategic deal underscores Wabtec’s commitment to innovation, productivity, and safety for its customers while positioning the company for accelerated and profitable growth.
With a legacy spanning over 50 years, Inspection Technologies has established itself as a pioneer in advancing mission-critical applications. The company serves a diverse global customer base through a well-distributed sales network and operates four engineering and production facilities in North America and Japan. Supported by a team of over 1,300 professionals, Inspection Technologies delivers high-value solutions that cater to a wide range of industries.
Strategic Significance of the Acquisition
“The addition of Inspection Technologies aligns with our growth strategy to accelerate the innovation of scalable technologies, increase our installed base, expand high-margin recurring revenues, and continuously drive operational performance,” stated Rafael Santana, President and CEO of Wabtec. The acquisition aligns with Wabtec’s broader vision of leveraging digital technologies to transform and enhance operational performance across industries.
Inspection Technologies’ expertise in advanced automated inspection capabilities will significantly expand Wabtec’s technology portfolio. By integrating this division, Wabtec aims to drive innovation in areas where data acquisition, analytics, and automation are increasingly critical. This acquisition will not only strengthen Wabtec’s offerings in rail, mining, and industrial sectors but also broaden its reach into complementary high-growth sectors.
Nalin Jain, President of Wabtec’s Digital Intelligence Group, emphasized, “I am incredibly excited to partner with Evident’s talented Inspection Technologies team to further enhance our presence in key markets and applications. Together, we will drive profitable growth, lead in customer value and innovation, and maximize value creation.”
Enhanced Capabilities and Synergies
The integration of Inspection Technologies into Wabtec’s operations is expected to create synergies that will unlock significant value. Leveraging Wabtec’s extensive software development expertise and engineering depth, the combined teams will accelerate the development of cutting-edge, intelligent monitoring solutions tailored to evolving industry needs.
Karen Smith, Executive Vice President of Evident Inspection Technologies, expressed confidence in the collaboration, noting, “Our deep expertise, shared commitment to innovation, and strong customer relationships will unlock significant value. The combination of our skilled teams and complementary portfolios will accelerate the development of first-class, intelligent monitoring solutions.”
Financial and Market Impact
Headquartered near Boston, Massachusetts, Inspection Technologies is forecasted to generate approximately $433 million in revenue for the 2024 calendar year, with an EBITDA of approximately $112 million. This translates to an impressive margin of 25.9%. Furthermore, the division’s recurring revenue stream, which constitutes about 68% of its total revenue, provides a highly stable and predictable financial base.
Wabtec’s acquisition of Inspection Technologies is expected to double its total addressable market (TAM) from $8 billion to $16 billion. This expansion positions Wabtec to deliver innovative solutions to a broader range of customers and solidifies its leadership in the digital intelligence space.
Transaction Details
The acquisition, valued at $1.78 billion (approximately $1.68 billion after tax benefits), reflects a significant investment in Wabtec’s growth strategy. The purchase price represents 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 transaction is anticipated to be immediately accretive to shareholder value, with a high single-digit revenue growth outlook and accretive Adjusted EBIT margins. Additionally, it is projected to enhance Adjusted Earnings Per Share (EPS) within the first year of ownership. The acquisition’s completion is contingent upon customary closing conditions and regulatory approvals, with finalization expected by the end of the first half of 2025.