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Federal Signal Corporation (NYSE: FSS) said Wednesday it will acquire Scranton Manufacturing Company Inc., known as New Way Trucks, in a $396 million deal, plus $30 million for facilities in Iowa and Mississippi. The agreement also includes up to $54 million in performance-based earnouts.
New Way, a family-owned business, is among the fastest-growing makers of refuse collection vehicles in the U.S. Its lineup includes rear, front, and automated side loaders, with a strong presence among municipal and private customers. The acquisition, expected to close in the fourth quarter of 2025 pending regulatory approval, broadens Federal Signal’s waste management footprint.
CEO Jennifer L. Sherman said the purchase will create a new vertical within Federal Signal’s specialty vehicle group. “We see significant opportunities to capture synergies and accelerate New Way’s growth and margin trajectory,” she said. The company plans to apply its chassis and inventory management practices to New Way’s operations.
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The transaction will be funded with cash and borrowing capacity, with net debt leverage projected at under 1.5x. Federal Signal said the price equates to about 11 times New Way’s estimated 2026 EBITDA, dropping to roughly seven times by 2028 as integration benefits are realized.
The company also expects the acquisition to strengthen its Environmental Solutions Group and generate long-term inorganic growth opportunities.
Federal Signal expects the deal to be neutral to earnings in 2026 due to integration costs and interest expenses, but accretive by 2028. Earnings per share are forecast to rise by 40 cents to 45 cents. Annual cost synergies are projected at $15 million to $20 million by the end of that year.
Federal Signal, on June 30, 2025, held cash and cash equivalents of $65 million.
Price Action: FSS shares closed 2.54% lower at $121.32 on Wednesday.
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