Forward Air set to acquire CST

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.

By ·

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!

Article Topics

Air Cargo · Forward Air · LTL · All Topics
Latest Whitepaper
Revisiting Supplier Relationship Management to Boost Real Value in the Supply Chain
Supplier relationship management (SRM) initiatives are on the rise, and companies who successfully implement these programs can realize a significant return on their technology investments.
Download Today!
From the May 2017 Issue
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management, but what sort of technologies fall under these broad terms, and how will they change the management capabilities at our disposal? To find out, we talked to some noted supply chain analysts, consultants and technology executives and gathered six digital trends to watch.
Transportation Trends and Best Practices: The Battle for the Last Mile
2017 Technology Roundtable: Are we closer to “Intelligent” Logistics?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Going Beyond Rate Negotiations for Logistics Cost Savings
The pressure to reduce cost is a fundamental part of every organization today leaving many supply chain professionals constantly renegotiating rates. This webcast examines four areas that may hold untapped savings potentials and even help organizations negotiate better rates.
Register Today!
EDITORS' PICKS
The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...

LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...