Transportation deals: Fenway Partners to acquire Fastfrate Inc.

Jeff Berman, Senior Editor -- Logistics Management, 11/20/2007

NEW YORK—Private equity firm Fenway Partners said yesterday it has signed a definitive agreement to acquire a majority interest in Fastfrate Inc., a Canadian concern comprised of Consolidated Fastfrate, Canada Drayage Inc., and Koch Transport.

Fenway had made more than 20 acquisitions in the transportation and logistics sector since 2000. Financial terms of the acquisition were not disclosed.

Fastfrate has more than 1,500 employees and transports more than 2 billion pounds of freight on an annual basis, according to a Fenway statement. It was founded in 1966, and it offers various service offerings, including point to point less-than-truckload (LTL) and truckload haulage within Canada and the Northwest and Midwest United States. Other services offered include national drayage and cartage, warehousing, east coast and west coast transloading, special operational direct ship programs for retailers, third-party logistics, and LTL intermodal services. It also has an established 40-year relationship with Canadian Pacific Railway (CP), with co-located facilities with CP in every intermodal yard in Canada except for Edmonton, which is in development. Fastfrate has 17 operating terminals across Canada and a Shanghai-based sales office, noted the Fenway statement. And it handles more than 25,000 maritime containers from China per year.

Fenway Partners Managing Director and Co-Head of its Transportation/Logistics practice Marc Kramer told Logistics Management that Fastfrate’s attractive market position in Canada was a main catalyst for this acquisition.

“While Fenway has extensive investments in the transportation and logistics in the United States, we saw Fastfrate as a great opportunity to develop a strong foothold in Canada as well,” said Kramer. “Additionally, we believe that our expertise and experience in the United States can be translated into growing Fastfrate’s business in Canada. Likewise, Fastfrate’s senior management team has unique experience and insight that will help Fenway run all of our businesses better.”

In terms of what made Fastfrate a strong investment opportunity for Fenway, John Q. Anderson, Fenway Partners managing director and Co-Head of its Transportation/Logistics practice, told LM that Fenway was attracted to Fastfrate’s demonstrated success in growing and diversifying its business to meet the demands of its customers. He added that Fenway was also very impressed by Ron Tepper, Fastfrate president and chief executive officer, and the rest of his senior management team, noting that he believes they possess the talent and experience necessary to continue to grow Fastfrate’s business in partnership with Fenway.

“When we buy a business, Fenway’s initial focus is always on customers’ needs,” said Anderson. “Fenway has no plans to change Fastfrate’s existing service offerings, only add to them as we help accelerate its growth plans and meet the demands of its expanding customer base. Fenway has a long track record of improving service offerings based on the needs of our customers.”

Shipper benefits:
Kramer and Anderson said that shippers should expect to see a continuation of the creativity and attention to detail that Fastfrate is known for. They added that by combining Tepper and the Fastfrate team with Fenway and its extensive expertise in developing new offerings, shippers can expect to see new services that are responsive to their needs. 

This transaction is currently undergoing the approval process by Canadian regulatory authorities, and Fenway is confident that this transaction will close before year end.

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