3PL News: RRTS completes acquisition of Prime Logistics Corporation
September 02, 2011
Non asset-based third-party logistics services provider Road Runner Transportation Services (RRTS) said it has officially closed its acquisition of the outstanding stock of Prime Logistics Corporation for roughly $97.5 million.
This is the latest in a series of acquisitions RRTS has made in recent months.
As a non asset-based provider of logistics and freight consolidation, Prime had roughly $67.5 million in 2010 revenues. Its customers are primarily made up of food producers who ship more than 1 billion pounds of product to retailers, distributors, and warehouses. Prime has more than 2 million square-feet of facilities, with its service menu comprised of freight consolidation, inventory management, warehousing, order fulfillment, and less-than-truckload and truckload services.
“Prime’s service offerings are designed to give customers the cost benefit of shipping truckloads into Prime, with Prime shipping outbound freight to end destinations through consolidation with other shippers’ products, which Prime does through its warehouse locations by shipping multiple customers’ goods to the same address or location,” said RRTS President and CEO Mark DiBlasi on a recent conference call.
Prime is able to achieve cost savings for its customers while exceeding the requirements imposed upon it by those customers, which include large retailers like Wal-mart, Costco, and Target, among others.
Other benefits of Prime’s service offerings for shippers cited by DiBlasi include shipping cost savings, reduced transit times, more effective inventory management, order fill rates in the 96 percent-to-100 percent range, as well as help shippers reach specific delivery dates required by large mass merchandisers they do business with.
This deal follows recent acquisitions made by RRTS, including: February’s acquisition of Morgan Southern, a privately-held provider of intermodal transportation and related services for roughly $20 million; May’s acquisition of Wichita, Kansas-based truckload services provider Bruenger Trucking Company; and July’s acquisition of The James Brooks Company is a provider of intermodal transportation and related services for the ports of Los Angeles/Long Beach and Oakland.
“RRTS is capable of folding in small acquisitions that can improve scale, geographic reach, and service capabilities,” wrote Robert W. Baird & Co. analyst Jon Langenfeld in a research note. “We look for RRTS to acquire one to three targets annually that could each add $30-50 million in revenue…while expanding density, most likely within its TL Brokerage and TMS segments.”
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