Reuters: Hot Stocks: UPDATE 3-3M pays $110 mln for Federal Signal highway technology

Reuters: Hot Stocks Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 3-3M pays $110 mln for Federal Signal highway technology Jun 21st 2012, 13:58 Thu Jun 21, 2012 9:58am EDT * Intends to use proceeds to reduce debt * Deal expected to close in second half 2012 * 3M sees fast growth in electronic tolling * Federal Signal shares soar 18 pct in early trading By Nick Zieminski June 21 (Reuters) - 3M Co will expand its traffic safety division by paying $110 million for the electronic tolling business of Federal Signal Corp, a safety and transportation systems maker, sending Federal Signal shares up 18 percent in early trading. Federal Signal, which had outstanding debt of $235.6 million as of March 2012, said it would use the proceeds to reduce debt. The technology business, known as FSTech, contributes about 13 percent of Federal Signal's total revenue. Revenue at the business was $28.5 million for the first quarter of 2012. FSTech, which employs about 500 people, develops hardware and software for applications used in electronic tolling, parking and access control, and electronic vehicle registration. Electronic tolling, already a $3 billion market, is expected to grow by double digits as cash-strapped governments turn to tolls to fund highway infrastructure. 3M, which expects to spend $1 billion to $2 billion on deals this year, said the transaction should close by the end of the year. It has said deals are more likely to be small "bolt-on" acquisitions than transformative ones. "I think the price and growth expectations right now are a little bit more realistic than they were over the last year or two," 3M CFO David Meline told an investor conference this month. Jefferies & Co Inc advised Federal Signal on the deal. Federal Signal's shares jumped 18 percent, or 86 cents, to $5.60 on the New York Stock Exchange, where they were the leading percentage gainer. 3M stock gained 0.9 percent to $88.32. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions