Wabtec's Strategic Acquisition: Boosting Digital Intelligence and Expanding Market Reach

Wabtec Corporation (NYSE: WAB) has announced a strategic acquisition of Evident's Inspection Technologies division for $1.78 billion, a move that aligns with its long-term growth strategy and positions the company for accelerated, profitable growth. The acquisition, expected to close by the end of the first half of 2025, will strengthen Wabtec's portfolio, accelerate its penetration into high-growth industrial markets, and reinforce its commitment to enhancing customer productivity, reliability, and safety.

Inspection Technologies, formerly part of the Scientific Solutions Division of Olympus Corporation, is a global leader in Non-Destructive Testing, Remote Visual Inspection, and Analytical Instruments solutions for mission-critical assets. With a 50-year legacy of innovation and a strong customer base served through a geographically distributed sales force and four engineering and production facilities in North America and Japan, Inspection Technologies brings highly attractive and complementary technologies to Wabtec's Digital Intelligence business.

The acquisition is expected 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. Additionally, the acquisition is projected to be slightly accretive to Adjusted EPS in the first year of ownership. 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 addition of Inspection Technologies aligns with Wabtec's growth strategy to accelerate the innovation of scalable technologies, increase its installed base, expand high-margin recurring revenues, and continuously drive operational performance. Inspection Technologies' leading industry presence and innovative product portfolio will significantly expand Wabtec's capabilities, adding advanced automated inspection capabilities, driving technology in a space where data acquisition, analytics, and automation are critical. Moreover, the integration of Inspection Technologies into Wabtec will leverage Wabtec's extensive software development expertise, engineering depth, and focus on operational excellence to deliver superior solutions to customers.

Inspection Technologies' global customer base, combined with Wabtec's existing market presence, creates cross-selling opportunities across rail, mining, and industrial sectors. The acquisition expands 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.



In conclusion, Wabtec's acquisition of Evident's Inspection Technologies division is a strategic move that aligns with its long-term growth strategy. The acquisition will strengthen Wabtec's portfolio, accelerate its penetration into high-growth industrial markets, and reinforce its commitment to enhancing customer productivity, reliability, and safety. With a strong financial outlook and expanded market reach, Wabtec is well-positioned to capitalize on the growing demand for advanced inspection and monitoring solutions in the rail, mining, and industrial sectors.