Cardinal Logistics and Greatwide Logistics complete merger
February 13, 2013
Two third-party logistics (3PL) service providers—Greatwide Logistics Services LLC and Cardinal Logistics Management Inc.—said today they have completed a merger of their two companies, which they said will create a market leading logistics organization that offers a broad service platform with annual revenues of more than $1 billion.
Greatwide and Cardinal officials said that the combined company’s dedicated contract carriage and delivery division will have one of the largest, most diverse dedicated fleet operations in the country and will be uniquely positioned to provide industry leading capabilities for its customers with over $850 million in annual revenue, 5,000 drivers, 125 operating locations and demonstrated expertise across multiple industries, including grocery, bulk food, retail, metals and building products.
In terms of synergies each company brings to the table, they explained that Cardinal’s expertise in high touch, final mile company truck dedicated services paired with Greatwide’s strength with high service, flexible owner operator based dedicated service will create a compelling customer value proposition. And they added that the combined company’s highly customized, value-added irregular route truckload, less than truckload, full service freight brokerage, managed transportation, and warehousing services will be available across the U.S. and Canada.
Jerry Bowman, president and COO of Cardinal Logistics, told LM that this merger made sense on multiple levels, with one main driver being that both Cardinal and Greatwide had the same majority owner, New York-based private investment firm Centerbridge Partners.
“The companies [also] had a significant overlap in services so it made sense to merge,” he said. “The merger will increase service offerings of both companies and should produce operational efficiencies over time.”
Bowman added that the combined company will operate approximately 5,500 power units on behalf of more than 50 customers in the dedicated market.
As for the integration of Cardinal and Greatwide, he said integration planning has been underway for several months. “The overarching goal is do it well, not fast and to make it invisible to customers,” he said.
It is anticipated the integration activities will take the majority of 2013, he said.
Greatwide CEO John Tague, former president of United Airlines, will serve as chairman and CEO of the combined company, and Vin McLoughlin, chairman of Cardinal Logistics, will serve as vice chairman.
“This merger should benefit both operations,” said Dick Armstrong, chairman of supply chain consultancy Armstrong & Associates. “Their strengths are complimentary. McGloughlin has looked for a change for Cardinal for several years. Greatwide’s strength has been its DCC operations with a heavy emphasis on the use of owner-operators. Greatwide should benefit from McCloughlin’s experience which goes back to JB Hunt’s DCC operations.”
The financial restructuring effort for Greatwide began in earnest in 2008, when initially announced it had been acquired by affiliates of private investment firm Centerbridge Partners and other investors, including the D.E. Shaw Group, among others. This deal enabled Greatwide to quickly complete its financial restructuring and address its capital structure needs without operational and service disruptions. The deal reduced the company’s debt by $478 million—or 77 percent.
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