L.B. Foster, Portec to join forces

L.B. Foster Company, the 108-year-old manufacturer, fabricator, and distributor of products and services for the rail, construction, energy, utility, and recreation markets with approximately 30 locations throughout the U.S., plans to acquire 104-year-old Portec Rail Products, Inc., to “expand its capabilities in its rail products business,” the company said in an announcement Wednesday.

L.B. Foster and Portec Rail Products, Inc., both headquartered in Pittsburgh, Pa., and both listed on the NASDAQ (FSTR and PRPX, respectively), jointly announced the signing of an Agreement and Plan of Merger, under which L.B. Foster will make, through its wholly owned acquisition subsidiary, a cash tender offer to acquire all of Portec’s outstanding shares of common stock for $11.71 per share. L.B. Foster shares were trading at $27.31, up 2.86%, as of 11:00 a.m. Feb. 17; Portec shares were trading at $11.62, up 3.47%.

“The proposed acquisition will bring together two organizations with a rich history of successfully delivering products and services to the global rail industry,” said L.B. Foster President and CEO Stan Hasselbusch. “The addition of Portec will complement our existing array of products and furthers our strategic initiative of becoming a premier provider of products and services below the wheel for Class I, transit, short line, and regional railroads and contractors in North America, as well as to governmental agencies and rail contractors globally.”

Said Portec President and CEO Richard J. Jarosinski, “Both companies have a strong reputation for quality and operational excellence in providing a wide range of products for the rail industry. We couldn’t be more pleased than to be joining forces with the Foster team.”

Portec serves the domestic and international rail markets by manufacturing, supplying, and distributing a broad range of rail products, rail anchors, rail spikes, railway friction management products and systems, rail joints, railway wayside data collection and data management systems, and freight car securement systems. The company also manufactures material handling equipment forindustries outside the rail transportation sector through its United Kingdom operation. Portec operates through four global business segments: Railway Maintenance Products (Salient Systems), Shipping Systems, Portec Rail Nova Scotia Company in Canada (Kelsan friction management, rail anchor, and spike products), and Portec Rail Products, Ltd. in the U.K. (material handling and Coronet Rail products).

The transaction is subject to the satisfaction of certain conditions, including Hart-Scott-Rodino antitrust clearance, at least 65% of Portec’s outstanding shares being tendered, and customary closing conditions. It is expected to close before the end of second-quarter 2010.