Federal Signal Corporation signed a definitive agreement to acquire Scranton Manufacturing Company Inc., operating as New Way Trucks, a leading U.S.-based designer and manufacturer of refuse collection vehicles. The initial purchase price is $396 million, with an additional $30 million for New Way's manufacturing facilities and associated real estate rights in Iowa and Mississippi. A contingent earn-out opportunity of up to $54 million is also included, based on the achievement of certain specified financial targets over a two-year period.
This acquisition establishes a new vertical within Federal Signal's specialty vehicle portfolio, representing a meaningful expansion into the recession-resilient waste and recycling industry. New Way Trucks has established itself as one of the fastest-growing refuse truck manufacturers in North America, with a full range of automated side loaders, rear loaders, and front loaders, serving both municipal and private-hauler customers.
The transaction is expected to be neutral to earnings per share in 2026, reflecting planned business investments, integration, and optimization initiatives. However, it is anticipated to be accretive to EPS in subsequent years, with expected accretion of between $0.40 and $0.45 in 2028, including anticipated annual run-rate synergies of between $15 million and $20 million. The acquisition is expected to close during the fourth quarter of 2025, subject to regulatory approval and customary closing conditions.
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