Federal Signal to Acquire Mega Corp.; Expand Specialty Metal Extraction Support Equipment Vertical

Rhea-AI Summary

Federal Signal (NYSE:FSS) signed a definitive agreement to acquire Mega Corp. for $45.5 million in cash, subject to post-closing adjustments, with the purchase including Mega's manufacturing facility in Albuquerque, New Mexico.

Mega reported approximate $40 million net sales for the year ended Dec 31, 2024, with aftermarket parts ~30% of sales and about 95 employees. The transaction is expected to be accretive to earnings and cash flow in 2026 and is anticipated to close in Q1 2026, subject to customary closing conditions.

Positive

• Purchase price of $45.5 million cash
• Mega net sales ~$40M for year ended Dec 31, 2024
• Aftermarket parts represent ~30% of net sales
• Adds ~95 employees and an Albuquerque manufacturing facility
• Transaction expected accretive to earnings and cash flow in 2026

Negative

• Purchase consideration subject to post-closing adjustments
• Closing subject to customary conditions and only anticipated in Q1 2026

Key Figures

Purchase price $45.5 million Cash consideration for Mega Corp., subject to post-closing adjustments

Mega 2024 net sales $40 million Net sales for year ended December 31, 2024

Aftermarket mix 30% of net sales Aftermarket parts share of Mega’s 2024 net sales

Employees added 95 team members Approximate Mega headcount joining Federal Signal

Accretion timing 2026 Transaction expected to be accretive to earnings and cash flow in 2026

Expected close Q1 2026 Anticipated closing period, subject to customary conditions

Market Reality Check

$113.44 Last Close

Volume Volume 381,931 is below the 20-day average of 570,834, indicating subdued pre-news trading. low

Technical Price at $109.55 is trading above the 200-day MA ($105.03), reflecting an established uptrend into this deal.

Peers on Argus

FSS was down 1.54% pre-announcement, while peers showed mixed moves (e.g., CECO -6.71%, PCT -4.97%, VLTO +1.04%), pointing to stock-specific rather than broad sector action.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 26	Acquisition completed	Positive	+1.0%	Completion of New Way Trucks acquisition and raised 2025 outlook.
Oct 30	Earnings results	Positive	-10.8%	Strong Q3 growth and higher guidance but shares fell sharply.
Oct 28	Dividend declaration	Positive	+0.5%	Quarterly cash dividend of $0.14 per share announced.
Oct 16	Earnings call notice	Neutral	+0.5%	Scheduled Q3 2025 earnings release and investor conference call.
Sep 24	Acquisition announced	Positive	+1.2%	Agreement to acquire New Way Trucks and expand refuse vehicle platform.

Pattern Detected

Recent FSS news has mostly seen aligned, modest positive price reactions, with a notable divergence on strong Q3 earnings.

Recent Company History

Over recent months, Federal Signal has been actively expanding its specialty vehicle platform through acquisitions and solid operating performance. The company agreed to acquire New Way Trucks on Sep 24, 2025 and later completed that deal, raising its 2025 net sales and EPS outlook. Strong Q3 results on Oct 30, 2025 showed double‑digit growth but saw a sharp negative reaction. The Mega Corp. acquisition continues this acquisition-led growth strategy within metal extraction support, following prior deals like Hog Technologies and New Way.

Market Pulse Summary

This announcement extends Federal Signal’s acquisition-driven expansion, adding Mega Corp. for $45.5 million in cash and roughly $40 million in 2024 net sales, with 30% from aftermarket parts. The deal deepens its metal extraction support equipment vertical and is expected to be accretive to earnings and cash flow in 2026, with closing targeted for Q1 2026. In context of recent acquisitions like Hog and New Way, investors may watch integration execution, margin performance, and aftermarket growth to assess strategic benefits.

Key Terms

definitive agreement regulatory

"today announced the signing of a definitive agreement to acquire Mega Corp."

A definitive agreement is a formal, legally binding document that outlines the final terms and conditions of a deal or transaction, such as a sale or partnership. It acts like a detailed contract that confirms all parties have agreed on the key details, making the deal official. For investors, it signals that the agreement is settled and moving toward completion, providing clarity and security about the transaction.

cash consideration financial

"for cash consideration of $45.5 million, subject to post-closing adjustments."

Cash consideration is the actual money paid to buy a company, asset, or stake rather than payment in shares or other forms. For investors it matters because cash payments deliver immediate, certain value and affect the buyer’s and seller’s cash reserves and balance sheets—like selling a car for cash versus taking a trade-in, one side gets instant spending power while the other changes its liquidity and risk profile.

post-closing adjustments financial

"for cash consideration of $45.5 million, subject to post-closing adjustments."

Amounts added to or subtracted from a transaction’s final purchase price after a deal closes to reflect the buyer’s and seller’s actual financial picture at the handover — for example final cash on hand, outstanding debts, or inventory levels. Think of it like checking the utility bills and meter readings after moving out of a rented house and adjusting the final bill accordingly. Investors care because these adjustments change the real cash exchanged, affect reported earnings and balance sheets, and can alter the expected return or risk of an investment.

aftermarket parts financial

"with aftermarket parts representing approximately 30% of net sales."

Aftermarket parts are replacement or add-on components sold for a product after its initial purchase, made either by the original manufacturer or by independent suppliers. For investors, they matter because they generate ongoing sales and profit long after the first purchase, influence customer loyalty and brand perception, and can affect warranty costs and supply-chain risk—like replacement tires or phone chargers that keep revenue coming even after the main sale.

accretive to earnings financial

"The transaction is expected to be accretive to earnings and cash flow in 2026."

When a deal or action is described as "accretive to earnings," it means the transaction is expected to increase the profit allocated to each share held after the change. Think of slicing a pie: if the pie grows faster than new slices are added, each slice gets bigger. Investors care because larger per-share profits can justify a higher share price and signal the move strengthens shareholder value.

AI-generated analysis. Not financial advice.

DOWNERS GROVE, Ill., Dec. 18, 2025 /PRNewswire/ -- Federal Signal Corporation (NYSE: FSS) (the "Company" or "Federal Signal"), a leader in environmental and safety solutions, today announced the signing of a definitive agreement to acquire Mega Corp. ("Mega"), a leading manufacturer of specialty vehicles and equipment for use in global metal extraction and construction markets, for cash consideration of $45.5 million, subject to post-closing adjustments. The purchase price includes the acquisition of Mega's manufacturing facility in Albuquerque, New Mexico.

For nearly 50 years, Mega has been recognized for designing and manufacturing durable, high-performance water distribution equipment, service bodies, and specialty haulage equipment compatible with articulated trucks, rigid-frame trucks, and wheel tractor scrapers. With its products used in some of the world's most demanding operating environments, Mega has developed a strong market presence in key international markets.

"The acquisition of Mega enhances our depth in the global metal extraction support equipment market and represents a compelling strategic fit with our existing Ground Force and TowHaul businesses. We have followed Mega for many years and see this acquisition as a logical extension of our growing metal extraction support vertical within our specialty vehicle platform," said Jennifer L. Sherman, President and Chief Executive Officer.

"Looking ahead, we see significant growth opportunities through our complementary product portfolio, shared customer base, and enhanced global reach. We also see strong potential to leverage the power of our specialty vehicle platform, particularly across key centers of excellence such as operations and aftermarket parts and service support. We are excited to welcome Mega's approximately 95 talented team members to the Federal Signal family."

Mega generated net sales of approximately $40 million for the year ended December 31, 2024, with aftermarket parts representing approximately 30% of net sales.

The transaction is expected to be accretive to earnings and cash flow in 2026.

The Company anticipates completing the transaction during the first quarter of 2026, subject to customary closing conditions.

D.A. Davidson & Co. served as a financial advisor to the Company in connection with the transaction.

About Federal Signal

Federal Signal Corporation (NYSE: FSS) builds and delivers equipment of unmatched quality that moves material, cleans infrastructure, and protects the communities where we work and live. Founded in 1901, Federal Signal is a leading global designer, manufacturer and supplier of products and total solutions that serve municipal, governmental, industrial and commercial customers. Headquartered in Downers Grove, Ill., with manufacturing facilities worldwide, the Company operates two groups: Environmental Solutions and Safety and Security Systems. For more information on Federal Signal, visit: www.federalsignal.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
This release contains unaudited financial information and various forward-looking statements as of the date hereof and we undertake no obligation to update these forward-looking statements regardless of new developments or otherwise. Statements in this release that are not historical are forward-looking statements. Forward-looking statements should not be relied upon as a predictor of actual results. Such statements are subject to various risks and uncertainties that could cause actual results to vary materially from those stated. Such risks and uncertainties include but are not limited to: economic and political uncertainty, risks and adverse economic effects associated with geopolitical conflicts including tariffs and other trade conflicts, legal and regulatory developments, foreign currency exchange rate changes, inflationary pressures, product and price competition, supply chain disruptions, availability and pricing of raw materials, interest rate changes, risks associated with acquisitions such as integration of operations and achieving anticipated revenue and cost benefits, work stoppages, increases in pension funding requirements, cybersecurity risks, increased legal expenses and litigation results and other risks and uncertainties described in filings with the Securities and Exchange Commission.

View original content:https://www.prnewswire.com/news-releases/federal-signal-to-acquire-mega-corp-expand-specialty-metal-extraction-support-equipment-vertical-302645855.html

SOURCE Federal Signal Corporation

FAQ

How much is Federal Signal paying to acquire Mega Corp (FSS)?

Federal Signal agreed to acquire Mega for $45.5 million in cash, subject to post-closing adjustments.

When is the Federal Signal (FSS) acquisition of Mega expected to close?

The company anticipates completing the transaction during Q1 2026, subject to customary closing conditions.

What were Mega Corp's sales and aftermarket mix before the FSS acquisition?

Mega generated approximately $40 million in net sales for year ended Dec 31, 2024, with aftermarket parts about 30% of net sales.

Will the Federal Signal acquisition of Mega affect FSS earnings?

Federal Signal said the transaction is expected to be accretive to earnings and cash flow in 2026.

Does the FSS acquisition include Mega's manufacturing facility?

Yes; the purchase price includes Mega's manufacturing facility in Albuquerque, New Mexico.

How many employees does Mega add to Federal Signal (FSS)?

Mega brings approximately 95 team members to Federal Signal.