More on DM&E sale to Canadian Pacific

Foster Announces Sale of DM&E Interest

PITTSBURGH, Sept. 5 /PRNewswire-FirstCall/ -- L.B. Foster Company ("Foster") , today announced that the Canadian Pacific Railway Limited ("CP") has reached an agreement to acquire the Dakota Minnesota and Eastern Railroad ("DM&E") in which Foster holds a minority equity interest. The deal consists of a $1.48 billion cash payment at closing and future contingent payments of up to approximately US $1 billion. Future contingent payments of US $350 million become due if construction starts on the Powder River Basin Expansion project prior to December 31, 2025. Further future contingent payments of up to approximately US $700 million will become due upon the movement of specified volumes of coal from the Powder River Basin over the Powder River Basin extension prior to December 31, 2025.

For Foster, the acquisition will result in a payment of approximately $151.5 million at closing ($14.24/share), approximately $41.6 million ($3.90/share) upon commencement of construction of the PRB, and up to $84.2 million ($7.90/share) upon achieving milestones related to PRB coal tonnage thresholds. The above numbers, which are subject to adjustments both before and after closing, are all pretax except for the payment at closing which will include approximately $17.4 million of return of investment and accrued dividends.

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