Subscribe to our free, weekly email newsletter!


Forward Air set to acquire CST

By Staff
January 24, 2014

Air cargo transportation services provider Forward Air Inc. said it inked a definitive agreement to acquire the stock of Central States Trucking Company and Central States Logistics. 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.

Forward officials said the transaction price was $95.6 million, with CST to be acquired on a cash-free debt basis with an adjustment for working capital and is expected to be made official during the first quarter.

“We are very excited about the acquisition of CST,” said Bruce A. Campbell, Chairman, President and CEO of Forward Air Corporation, in a statement. “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

The Institute for Supply Management’s (ISM) August edition of the Manufacturing Report on Business saw its PMI, the ISM’s index to measure growth, fall 1.6 percent to 51.1, following a 0.8 percent decline to 52.7 in July. Even with the relatively slow growth over the last two months, the PI has been at 50 or higher for 31 consecutive months.

Hackett observed in the new report that China’s economy has lost steam, with actual growth falling short of targeted rates, while the United States most recent second quarter GDP reading at 3.7 percent outpaced expected targets, even though it was negatively impacted by gains in manufacturing and retail inventories.

The proposed merger of Cosco and CSCL could spark further container consolidation

The average price dropped 4.7 cents to $2.514 per gallon, which now stands at the lowest weekly average price for diesel since July 2009, when it was at $2.542 the week of July 27, 2009, according to EIA data.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement partners Canada and Mexico in June dropped 3.8 percent annually to $99.0 billion. This followed a 10.8 percent decline in May to $92.7 billion.

Article Topics

News · Air Cargo · LTL · Forward Air · All topics

Comments

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


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA