New Flyer Acquires Carlson Engineered Composites Inc.
Winnipeg, Manitoba, Canada, June 1, 2017: (TSX:NFI) (TSX:NFI.DB.U) New Flyer Industries Inc. (“New Flyer” or the “Company”), the largest transit bus and motor coach manufacturer and parts distributor in North America, announced today that it has acquired Carlson Engineered Composites Inc. (“Carlson”) and the assets of its US affiliated companies, a privately-owned composites company, headquartered in Winnipeg, Manitoba for USD $13 million, subject to certain normal and customary purchase price adjustments.
Carlson manufactures fiberglass reinforced polymer (FRP) components primarily to original equipment manufacturers of transportation vehicles and agricultural equipment, with 2016 sales exceeding USD $38 million. Carlson currently employs over 300 people at three production facilities totaling 235,000 square feet and located in Winnipeg, MB; St Cloud, MN and Anniston, AL.
Carlson’s business began in 1985 with industrial and custom part fabrication, from which evolved a line of fibre-glass reinforced plastic (FRP) water and sewage tank manufacturing. The business later expanded with the introduction of a line of truck caps and other recreational vehicle parts. Carlson then became involved in the development and supply of FRP parts and sub-assemblies to the transportation industry.
“The acquisition of Carlson will allow us to control of one of the more critical commodities in our manufacturing supply chain”, said David White, New Flyer Group’s Executive Vice President, Supply Management. “As we think about the businesses of Carlson and Frank Fair Industries Ltd., the Winnipeg FRP business owned by Motor Coach Industries Limited since 1991, we can explore sharing best practices in composite part manufacturing, optimizing processes, and pursuing new technologies.”
Mr. White further explained, “This acquisition follows on the very successful repatriation and in-sourcing of various metal part fabrication, machining and painting operations across the Company to control quality, improve delivery performance and reduce costs for our bus manufacturing operations. Carlson’s U.S. facilities will also contribute to the Company complying with the increasing U.S. content requirements under increased Buy America regulations resulting from the 2015 FAST Act for the purchase of transit buses and motor coaches by U.S. federally-funded transit agencies.”
Neil Carlson, Founder and Chairman of Carlson Engineered Composites Inc. commented, “We are very proud to have become a leader in providing complex fiberglass components to transit buses. Our team has developed a tradition of integrity, execution and profitable growth and has been committed to maintaining a competitive advantage through education, innovation and technology. We have admired New Flyer and followed their growth into the US with Carlson facilities dedicated to support their operations. Joining the New Flyer family is the next logical step to support further growth and explore new technologies.”
About the Company
The Company employs over 5,000 team members and is the largest transit bus and motor coach manufacturer and parts distributor in North America with fabrication, manufacturing, distribution and service centers in Canada and the United States.
Through its Canadian and U.S. subsidiaries, New Flyer Industries Canada ULC and New Flyer of America Inc., the Company is North America’s heavy-duty transit bus leader and offers the broadest transit bus product line, incorporating the broadest range of drive systems available, including: clean diesel, natural gas, diesel-electric hybrid, electric-trolley and now battery-electric. New Flyer actively supports over 44,000 heavy-duty transit buses (New Flyer, NABI and Orion) currently in service.
Through its Canadian and U.S. subsidiaries, Motor Coach Industries Limited and Motor Coach Industries, Inc., the Company is the leader in motor coaches in Canada and the U.S., offering the MCI J4500, which is the industry’s best-selling intercity coach for 11 consecutive years, and the MCI D-Series, the industry’s best-selling coach line in North American motor coach history. MCI is also the exclusive distributor of Setra S417 and S407 in the United States and Canada. MCI actively supports over 28,000 motor coaches currently in service and offers 24-hour roadside assistance 365 days a year.
The Company also operates North America’s most comprehensive aftermarket parts organization providing support for all types of transit buses and motor coaches. All buses and coaches are supported by an industry-leading comprehensive warranty, service and support network.
The common shares and convertible unsecured subordinated debentures of the Company are traded on the Toronto Stock Exchange under the symbols NFI and NFI.DB.U, respectively.
This press release contains forward-looking statements relating to expected future events, including the integration of the acquired business into the Company’s existing business and the operation of the business by the Company. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material. Actual results may differ materially from management expectations as reflected in such forward-looking statements for a variety of reasons, including risks related to the ability to implement the operational changes necessary to successfully integrate the business into the Company’s existing businesses, market and general economic conditions and economic conditions of and funding availability for customers to purchase buses and to purchase parts or services, which will have an impact on the volume of parts sold by the acquired company to the Company and the other risks and uncertainties discussed in the materials filed with the Canadian securities regulatory authorities and available on SEDAR at www.sedar.com. Due to the potential impact of these factors, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
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