FreightCar America (NASDAQ:RAIL) completed the acquisition of Carly Railcar Components on Monday, a strategic move designed to accelerate the expansion of its high-margin aftermarket business.
The deal brings a well-regarded, family-owned distributor into the company’s fold, significantly broadening its inventory of "running-repair" components—the essential parts required to keep North America’s freight fleet in continuous operation.
The acquisition provides FreightCar America with an established regional foothold in the Gulf Coast industrial corridor, centered on a strategic facility in Orange, Texas, near the Houston metropolitan area.
By integrating Carly’s distribution network, the Chicago-based railcar manufacturer expects to drastically reduce lead times for critical components and enlarge its "ready-to-ship" catalog.
This logistical advantage is particularly vital in the rail industry, where minimizing equipment downtime is a primary concern for Class I railroads and private fleet owners alike.
Management characterized the transaction as a key execution of its disciplined capital allocation framework.
FreightCar America has spent the last several years streamlining its manufacturing operations, and the acquisition of Carly Railcar represents a shift toward more consistent, recurring revenue streams found in the parts and services sector.
The company stated that the deal is expected to be immediately accretive to earnings as it scales the combined aftermarket operations and implements technical improvements across the unified logistics network.