New Heritage Backs Locomotive Parts Maker PowerRail

New Heritage Capital has made an investment in PowerRail, a manufacturer and distributor of aftermarket parts and remanufacturing services for locomotives.

PowerRail supplies the replacement parts and rebuilt components that keep freight and passenger locomotives running, selling both new and remanufactured items and taking worn units in for overhaul. The company’s product line includes the mechanical and electrical hardware that wears out over a locomotive’s decades-long service life including bearings and journal boxes that carry axle loads, electrical rotating parts such as traction motors and generators, engine components, air compressors, pumps and blowers.

Alongside distribution, the company runs remanufacturing and engineering operations that strip down, rebuild and upgrade used components to return them to service. The company also has the capability to custom engineer hard-to-source or obsolete parts. Customers of PowerRail include freight railroads, passenger and transit operators, leasing companies and rail maintenance shops.

Operating from manufacturing and distribution sites across the United States, PowerRail positions itself as an aftermarket alternative to original-equipment suppliers, emphasizing quality, availability and reduced lifecycle cost for operators managing aging fleets. PowerRail has been owned and led by its chairman and founder, Paul Foster, since 2003, and the investment from New Heritage is the company’s first institutional capital.

PowerRail, led by Chief Executive Officer Kevin Wright, is headquartered about 18 miles southwest of Scranton in Exeter, Pennsylvania, and has 160 employees. The company has additional facilities in Indiana, Georgia, and Australia.

New Heritage is investing through its Private IPO structure, a minority recapitalization strategy that provides founders with liquidity and growth capital while leaving day-to-day control with management.

“This is an exciting new chapter for us. With the support of New Heritage, we will be better positioned to scale our operations, expand our product portfolio, pursue strategic acquisitions, and continue delivering exceptional value to our customers. Most importantly, our core mission and customer-first approach will remain unchanged,” said Mr. Wright.

The locomotive aftermarket — replacement parts, remanufactured components and overhaul services for the installed fleet — sits within a North American railcar and locomotive parts market estimated at roughly $4.9 billion in 2025 and growing about 7 to 8 percent a year toward $8 billion by the early 2030s, according to Market.us and Coherent Market Insights. Aftermarket demand is comparatively steady: locomotives are capital-intensive assets with service lives measured in decades, so operators lean on repair, remanufacturing and parts replacement to stretch fleet life rather than buy new. Growth is driven by an aging North American fleet, freight volumes and pressure to control lifecycle costs, and the market is fragmented between original-equipment manufacturers such as Wabtec and a range of independent aftermarket suppliers competing on price, availability and turnaround.

“Paul built this company from the ground up and has devoted the past 23 years to its success. We are grateful for everything he has done for PowerRail and the rail industry. Though Paul will no longer serve in an operating role, his counsel and strategic vision will continue to help guide PowerRail in advancing its core mission,” added Mr. Wright.

“PowerRail’s breadth of products, technical capabilities, and reputation for service have made it a trusted leader in the locomotive aftermarket. We are excited to partner with the founder and management team to support the company’s next phase of growth. Through capital and strategic support, we will help management continue to expand PowerRail’s ability to serve its customers,” said Bret Kuchenbecker, a principal at New Heritage Capital.

New Heritage Capital, based in Boston, invests between $15 million and $40 million in minority or majority equity in companies with $4 million to $20 million in EBITDA. The firm focuses on sectors such as business services, healthcare, and manufacturing. In November 2023, New Heritage closed its fourth fund, New Heritage Capital IV LP, which exceeded its target with $438 million in capital.