
Wabtec Corporation
Industrials | United States

Target Price
Equity Value (Δ)
Source: Bloomberg end of day market data; not adjusted for dividends (May 14, 2018).
Summary
Wabtec Corporation (“Wabtec”) is a global provider of value-added, technology-based products and services for freight rail, passenger transit and other industrial segments.
WSD Capital Management announced its investment in Wabtec on September 27, 2016. We were attracted to the company due to the stable growth, scale relative to its peers, well-established and trusted brand, and high cash flow generation.
In 2016, the company acquired Faiveley Transport, its largest competitor in the world’s largest transit market (the acquisition was completed in March 2017). Wabtec management’s acquisition strategy has boosted the company’s exposure to the faster-growing mass-transit markets, which are expected to maintain their growth trajectories as emerging economies invest more in public transit and developed economies make a renewed push for energy efficiency.
While some of the unfavorable market conditions will continue to persist in 2017, we believe there is a meaningful opportunity at the company to improve operating margins by managing costs and enhancing competitiveness through a diligent integration of Faiveley.
On April 20, 2018, it was reported that General Electric is in discussions to sell its rail business to Wabtec.
We exited our investment in Wabtec in August 2018.