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 International Air Transport Association (IATA) announced August 2014 data for global air freight markets showing continued “robust”growth in air cargo volumes.

Even though some of its key metrics dropped sequentially from August to September, the outlook for manufacturing over all remains strong, according to the most recent edition of the Manufacturing Report on Business issued today by the Institute for Supply Management (ISM).

Company officials said that these planned changes, which will take effect on January 4, 2015, will provide for increases in current pay rates and reduce the time it takes for its nearly 15,000 drivers to reach top pay scale.

While the economy has seen more than its fair share of ups and downs in recent years, 2014 is different in that it could be the best year from an economic output perspective in the last several years. That outlook was offered up by Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics Report at last week’s CSCMP Annual Conference in San Antonio.

Matching last week, the average price per gallon of diesel gasoline dropped 2.3 cents, bringing the average price per gallon to $3.755 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

Article Topics

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

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA