EQS-News: Knorr-Bremse Aktiengesellschaft: Signaling technology as growth market: Knorr-Bremse finalizes acquisition of Alstom Signaling North America

Signaling technology as growth market: Knorr-Bremse finalizes acquisition of Alstom Signaling North America

• Following finalization of Alstom Signaling North America deal, Knorr-Bremse acquires all signaling business activities plus team of approximately 800 employees in six locations
• Entering highly profitable North American rail signaling segment contributes to BOOST 2026 strategy focused on sustainable growth and long-term profitability
• Safety-critical, mission-critical signaling technology business is excellent strategic, technological fit with Knorr-Bremse DNA
• Knorr-Bremse’s new Signaling business unit specializing in Control, Command and Signaling (CSS) technologies will establish company as Tier 1 systems and platform partner in global rail market

Munich, September 2, 2024 – Knorr-Bremse, the global market leader for braking systems and a leading supplier of other safety-critical systems for rail and commercial vehicles, has just finalized the acquisition of the conventional rail signaling business of Alstom Signaling North America. The investment represents a milestone in Knorr-Bremse’s strategic progress toward long-term profitability and sustainable growth. It will enable Knorr-Bremse to enter North America’s attractive market for signaling technologies (Control, Command and Signaling – CCS), which the company intends to enhance and globalize by developing new and digital solutions.

Marc Llistosella, CEO of Knorr-Bremse AG: “Our new rail signaling technology business in North America is both market-leading and high-margin – and thus an excellent fit with our Group strategy BOOST 2026, which is focused on long-term profitability and sustainable growth. Our entry into the North American signaling market is an outstanding example of Knorr-Bremse’s drive to create even greater value as we further develop our portfolio by entering new, highly promising areas of business. The acquisition also contributes to another strategic objective: to further enhance the Rail side of Knorr-Bremse’s business activities.”

Dr. Nicolas Lange, Member of the Executive Board of Knorr-Bremse AG with global responsibility for the Rail division: “Safety and reliability are key criteria for rail transportation – and largely depend on braking systems and signaling technology, as well as rail infrastructure. Entering the signaling market in North America is a logical step on our way to becoming a systems and platform partner supplying safety-critical, mission-critical solutions to the rail industry. The signaling business is suitably profitable, enjoys a high share of the service segment as a long-term revenue driver, and offers major opportunities for further development – for example in terms of digitalization, internationalization and market expansion. We welcome our fantastic new Signaling team into the company and look forward to working with our new colleagues as we grow together, launch major new projects and achieve great things – in North America and beyond.”

All North American business activities acquired

With this transaction, Knorr-Bremse has acquired the conventional signaling product portfolio, sales, service, and manufacturing operations of Alstom Signaling North America, primarily in the USA and Canada. The nearly 800 team members will become employees of KB Signaling, a standalone business under the North American rail organization. With two production plants and numerous engineering facilities in the USA, the new business unit operates in six major locations. Over the last financial year ending March 31, 2024, Alstom Signaling North America generated around EUR 300 million in revenues with an EBIT margin of around 16 percent.

Acquisition a perfect fit for Knorr-Bremse’s BOOST strategy

In line with Knorr-Bremse’s BOOST 2026 strategic program, the company is focusing on cutting-edge, highly profitable product areas that match the deep understanding of safety-critical, mission-critical solutions embedded in Knorr-Bremse’s DNA. Knorr-Bremse also has in-depth experience of entering complex markets and meeting the highest local approval and technology standards. Entering the rail signaling market segment represents a positive step toward achieving the company’s strategic objectives.

Five broad categories make up the new KB Signaling unit’s North American conventional CCS platform and solutions: wayside train and crossing control, and relays and track products – solutions that make up the vast majority of the portfolio, in addition to onboard train control, train supervision, as well as a robust set of Wayside Intelligence solutions, including data analytics. With coast-to-coast coverage, the portfolio is Buy America compliant and supported by solid R

On this basis, the company’s new Signaling business unit is already well positioned in the North American signaling market and ready to further expand its leadership by offering innovative CCS solutions. In the medium term, Knorr-Bremse aims to establish itself as an international Tier 1 systems and platform partner for train manufacturers, rail operators, and infrastructure and signaling technology firms. The company’s existing business activities in the European signaling market will be folded into the Signaling business unit.

Signaling represents significant global market opportunity

In particular, Knorr-Bremse sees business development opportunities in the further development of the company’s product portfolio, the creation of new solutions for smart interaction between trackside signaling technologies and onboard (braking) technologies, and new strategic acquisitions. Knorr-Bremse aims to help raise levels of safety, availability, reliability and operating efficiency in passenger and freight rail transportation by offering scalable solutions for the North American market, but also for the key European and Asian markets. Knorr-Bremse estimates that for the Rail division, the potential size of the global market for CCS rail signaling technology may be as much as EUR 20 billion.

Digitalization: infrastructure condition monitoring as growth area

The huge installed base of signaling products in rail operations offers major business opportunities, especially in view of the ongoing digitalization of rail transportation. Apart from the attractive aftermarket share, digital products and services for analyzing and processing infrastructure data are certain to interest many customers. Knorr-Bremse’s data solutions and software-as-a-service offerings could provide rail and fleet operators with, for example, precise updates on the condition and – based on factors such as weather and temperature – possible maintenance or repair requirements of their infrastructure.

Caption:

Thanks to market-leading expertise in safety-critical systems, Knorr-Bremse is well positioned to enter North America’s signaling technology market. | © Knorr-Bremse

Media contact:

Julian Ebert | Spokesperson Rail Mobility | Corporate Communications | Knorr-Bremse AG 

T +49 (0)89 3547 1497; E [email protected]

Investor relations:

Andreas Spitzauer | Head of Investor Relations | Knorr-Bremse AG

T +49 89 3547 182 310; E [email protected]

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market and technology leader for braking systems and a leading supplier of other rail and commercial vehicle systems. Knorr-Bremse products make a decisive contribution to improving safety and energy efficiency on rail tracks and roads around the world. Some 33,000 employees at over 100 locations in around 30 countries develop and produce innovative solutions and services that meet the highest technical standards. In 2023, Knorr-Bremse’s two divisions together generated global revenues of approximately EUR 7.9 billion. For almost 120 years, the company has been at the cutting edge of its industries, driving innovation in mobility and transportation technologies with a particular edge in connected system solutions. Knorr-Bremse is one of Germany’s most successful industrial companies and benefits directly from the key global megatrends: urbanization, sustainability, digitalization, and mobility.