Federal Signal’s $396M Bet On Refuse Trucks: Could This Trash Truck Deal Get Dirty?

Federal Signal Corporation has made a strategic move with its definitive agreement to acquire Scranton Manufacturing Company, doing business as New Way Trucks, for an initial consideration of $396 million. This deal, announced on September 25, 2025, includes an additional $30 million earmarked for real estate tied to New Way’s manufacturing facilities in Iowa and Mississippi. Further, a performance-based earnout of up to $54 million could be paid over the next two years. The acquisition is being financed through a mix of cash on hand and availability under Federal Signal’s credit facility. With the transaction expected to be EPS-neutral in 2026 and accretive by $0.40–$0.45 by 2028, synergies are expected in the range of $15–$20 million annually by the end of that year. This acquisition comes amid Federal Signal’s record-setting second quarter 2025 results, highlighting strong growth across its Environmental Solutions and Safety & Security Systems segments. As the company seeks to enhance its specialty vehicle platform, the integration of New Way Trucks could yield compelling synergies.