Federal Signal sells technology unit to 3M for $110 million

Oak Brook-based Federal Signal Corp. said it is selling its Federal Signal Technologies usiness to 3M Co. for $110 million in cash, subject to post-closing adjustments.

The transaction is subject to closing conditions and regulatory approvals, and is expected to be completed in the second half of 2012.

“The sale of our FSTech business to 3M presents the best opportunity to maximize FSTech’s value for Federal Signal shareholders, and complements 3M’s global portfolio,” said Dennis Martin, Federal Signal’s president and chief executive officer.

“I believe this transaction will benefit Federal Signal in two important ways: first, it will enable us to transform our balance sheet, and second, it will allow us to bring more focus to driving profitable growth in our core businesses of industrial and municipal equipment and safety and security solutions. We plan to intensify our commitment to new product development and excellence in customer service, and to expand certain businesses in response to the increasing global market demand for improved security and warning systems,” Martin added.

The FSTech business focuses on intelligent transportation solutions. FSTech’s hardware and software products are used in electronic tolling, parking and access control, law enforcement, and many other innovative applications such as electronic vehicle registration.

Federal Signal intends to use the proceeds from the transaction primarily to reduce debt. Jefferies & Co., Inc. advised Federal Signal on the transaction, and Thompson Coburn LLP served as Federal Signal’s legal counsel.