Subscribe to our free, weekly email newsletter!


Forward Air completes acquisition of CST

By Staff
February 06, 2014

Following a late January announcement in which it said it signed a definitive agreement to acquire the stock of Central States Trucking Company (CST) and Central States Logistics, air cargo transportation services provider Forward Air Inc, said today that the acquisition has formally closed.

Forward said that that the aggregate purchase price for CST was $95.6 million and is roughly eight times 2013 adjusted EBITDA, adding that the transaction is being funded by Forward Air’s cash reserves and is expected to be accretive to its 2014 earnings.

CST is a provider of container and intermodal drayage services in the Midwest and provides linehaul service within the airport-to-airport space, as well as, dedicated contract and Container Freight Station (“CFS”) warehouse services.

“We are very excited about the acquisition of CST,” said Bruce A. Campbell, Chairman, President and CEO of Forward Air Corporation, in a statement issued last month. “For a number of years we have had the desire to enter the drayage space via purchase of a company with a scalable platform. CST not only provides that platform, but does so while achieving the high margins and low asset intensity that our shareholders have come to expect from us. We look forward to the addition of this newest service offering to our airport-to-airport network, TLX full truckload, Complete pick-up and delivery, Solutions final mile and TQI temperature-controlled services. Undoubtedly, there will be both cross-selling and operational opportunities for our combined teams to take advantage of as we move forward.”

CST’s network is comprised of seven terminals and roughly 500 office employees and drivers, and in 2013 it had unaudited revenues of roughly $66 million.

CST CEO and President Bryan Grane said that CST combined with Forward Air’s strengths in expedited and final mile LTL solutions will enable CST to be the market leader in international supply chain trucking and warehousing, adding that together the companies have more than 90 terminals and 40 container freight stations.

Stifel Nicolaus analyst David Ross said in a research note that this deal is mutually beneficial for Forward and CST.

“This is the classic example of a good company (CST) who was hesitant to grow on its own, but, with a larger, stronger partner like Forward Air, the management team will look to expand and grow with its improved financial backing and broader portfolio of service offerings for its customers,” Ross noted. “In our view, this is a good deal for Forward Air and for Central States.”

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Now that the deal, which had to clear several regulatory hurdles in multiple countries, is official, FedEx executives were able to speak a little bit more freely, albeit being somewhat guarded in regards to certain integration specifics at the same time.

As the July 1st date for complete compliance looms, shippers are seeking help to cope with the mandatory changes instituted by the International Maritime Organization (IMO) to the Safety of Life at Sea Convention (SOLAS).

As of July 1, only containers with a verified gross mass will be cleared to be loaded onto a ship under the International Maritime Organization’s Safety of Life at Sea (SOLAS) Verified Gross Mass (VGM) amendment. Shippers hoping that the implementation of the ruling will be delayed or deferred are whistling in the dark, say industry analysts.

Amid the many worrisome economic indicators kicking around of late, something along the lines of good news came about this week in the form of United States new home sales data, issued by the United States Department of Commerce this week.

In March, the SCI came in at 0.4, which FTR described as “a near neutral reading” on the heels of four months of more favorable market trends for shippers.

Article Topics

News · Forward Air · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA