Subsequent Events

9 Months Ended

Sep. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Acquisition of Ground Force

On October 4, 2021, the Company completed the acquisition of substantially all the assets and operations of Ground Force Manufacturing LLC (“Ground Force”) for an initial purchase price of $43.1 million in cash. The initial purchase price, which is subject to certain post-closing adjustments, was funded through existing cash and borrowings under the Company’s revolving credit facility.

Ground Force is a leading manufacturer of specialty material handling vehicles that support the extraction of metals. The Company expects that the Ground Force acquisition will further bolster its position as an industry leading diversified industrial manufacturer of specialized vehicles for maintenance and infrastructure markets with leading brands of premium, value-adding products, and a strong supporting aftermarket platform.

The preliminary purchase price allocation has not been completed at this time, due to the proximity of the date of acquisition to the date of issuance of the condensed consolidated financial statements. The post-acquisition operating results of Ground Force are expected to be included within the Environmental Solutions Group.

Defined Benefit Plan Annuitization

On November 5, 2021, the Company entered into a commitment agreement to purchase a group annuity contract with an insurance company, under which approximately $24 million of the projected benefit obligation of the Federal Signal Corporation Retirement Plan (“U.S. Benefit Plan”) would be transferred to the insurance company. Under this transaction, the insurance company will assume responsibility for pension benefits and administration for approximately 800 retirees or their beneficiaries. As a result of this transaction, which will be funded with existing assets of the U.S. Benefit Plan, the Company expects to recognize a non-recurring, non-cash, pre-tax pension settlement charge of approximately $11 million in the fourth quarter of 2021.

Execution of Agreement to Acquire Deist

On November 9, 2021, the Company signed a definitive agreement to acquire substantially all the assets and operations of each of Deist Industries, Inc., Bucks Fabricating, LLC, Roll-Off Parts, LLC and Switch-N-Go, LLC (collectively “Deist”), all of which are located in Pennsylvania. The transaction includes an initial purchase price of $32.5 million, subject to post-closing adjustments. In addition, there is a contingent earn-out payment of up to $7.5 million, based upon the achievement of certain financial targets over a specified performance period.

Deist designs, manufactures and sells interchangeable truck body systems for class 3-7 vehicles in the work truck industry and a full line of waste hauling products, including front/rear loading containers and specialty roll-off containers.

The Company expects to complete the transaction before the end of the year, subject to customary closing conditions.