Hitachi Rail has agreed to acquire Thales’ Ground Transportation Systems (GTS) for an enterprise value of €1,660 million.

The final purchase price will be determined after customary adjustments typical for a transaction of this nature. 

The acquisition is expected to close in late FY2022, subject to the usual conditions including regulatory and antitrust clearances. 

GTS, a division of Thales, is a global leader in Rail Signalling and Train Control Systems, Telecommunications and Supervision systems and Fare collection solutions. 

The business consists of four segments: mainline railroad signalling systems, urban rail signalling, integrated communication systems and revenue collection systems.

In FY2020, GTS generated €1.6 billion of revenues and today employs around 9000 employees across 42 countries. 

Hitachi Rail expects GTS to show continued revenue and EBIT growth and by closing, the implied standalone forward EV/EBIT valuation multiple should be around 10x.