Federal Signal to expand refuse collection vehicles with New Way acquisition

Federal Signal Corporation operates in the environmental and safety solutions space, offering comprehensive systems across industries. Subsidiary brands Federal Signal providing environmental clean up solutions include Truvac and Vactor. The brand has now signed a definitive agreement to acquire Scranton Manufacturing Company Inc. d/b/a New Way Trucks, a U.S.-based designer and manufacturer of refuse collection vehicles, for an initial purchase price of $369 million. Federal Signal will also pay an additional $30 million for New Way's manufacturing facilities and associated real estate rights in Iowa and Mississippi.

As a family-owned business, New Way has established itself as one of the fastest-growing refuse truck manufacturers in North America with its reputation for quality, reliability, and service. New Way manufactures a full range of automated side loaders, rear loaders, and front loaders in its two primary U.S. production facilities, serving both municipal and private-hauler organizations.

The acquisition of New Way further strengthens Federal Signal's position as a manufacturer of premium, value-adding products, supported by a robust aftermarket platform. It also establishes a new growth vertical within the Environmental Solutions Group, creating additional inorganic opportunities longer term.

Federal Signal anticipates completing the transaction during the fourth quarter of 2025, subject to regulatory approval and customary closing conditions.

Financial Details

Singal expects the transaction to be neutral to earnings per share (EPS) in 2026, reflecting planned business investments, integration and optimization initiatives, higher interest cost, and anticipated purchase accounting effects, including a preliminary estimate of intangible asset amortization expense. Singal expects the transaction to be accretive to EPS in subsequent years, with anticipated EPS accretion of between $0.40 and $0.45 in 2028, including anticipated annual run-rate synergies of between $15 million and $20 million, currently expected to be substantially realized by the end of 2028.

Advisors

Deutsche Bank Securities is serving as lead financial advisor to the Company. Raymond James & Associates Inc. and William Blair are also serving as financial advisors to the Company. Thompson Coburn LLP and Mayer Brown are serving as the Company's legal advisors. Stifel is serving as the exclusive financial advisor to New Way.

New Way and Federal Signal celebrate the expansion ​

"The acquisition of New Way establishes a new vertical within our specialty vehicle portfolio and represents a meaningful expansion into the recession-resilient waste and recycling industry," said Jennifer L. Sherman, president and chief executive officer of Federal Signal. "With our deep expertise in selling refuse equipment through our direct distribution channel and our ability to leverage the power of our specialty vehicle platform, we see significant opportunities to capture synergies and accelerate New Way's growth and margin trajectory in coming years. Importantly, we believe New Way's leading U.S. position in automated side loaders and for municipal sales sets the foundation for continued outperformance within the refuse space. We are excited to welcome New Way's dedicated team of more than 750 employees to the Federal Signal family."

"The opportunity to join Federal Signal marks an exciting new chapter for our company," said Michael McLaughlin, chief executive officer of New Way. "As a family-owned company, we take great pride in our history of innovation, customer focus, and growth. Serving the local communities in which we operate and our commitment to employees are both of paramount importance to our company, and we believe that Federal Signal shares these values. They represent the right cultural fit to continue building on that legacy, while accelerating New Way's growth prospects going forward."