NEWMARKET, Ontario (Dec. 18, 2008)—AirBoss of America Corp. has sold its railway track fastening products business to Amsted Rail Company Inc. for about $6 million in cash.
Included in the deal were the unit's operating assets and intellectual property the operation, headquartered in Kansas City, Mo.
The business will continue to operate under the trade name AirBoss Railway Products. Cash and securities balances in the legal entity were retained by AirBoss.
For the nine-month period ended Sept. 30, the railway products business represented about 5 percent of AirBoss' consolidated sales and a slightly lesser amount of its profits, according to AirBoss. It was not considered a core business by AirBoss, which primarily focuses on rubber-based products and custom rubber compounding.
Amsted is a leader in the rail products industry, AirBoss said, and is in a position to more fully exploit the intellectual property developed.
In addition to cash proceeds of $6 million, which is subject to closing adjustments, there is also an earn-out provision in the purchase agreement which could result in additional amounts being paid to AirBoss if the earnings of the business increase over the next two years.
Proceeds from the sale will be used to reduce operating debt.