Forward Air’s acquisition of CLP Towne is a done deal

Air cargo transportation services provider Forward Air Inc. said today it has closed its acquisition of CLP Towne Inc., which was first announced in early February.

The purchase price is $125 million and is subject to an adjustment for working capital, according to Forward officials.

Established in 1963, South Bend, Ind.-based Towne is a full-service trucking provider that offers time-sensitive less-than-truckload shipping, full truckload service, an extensive cartage network, container freight stations, and dedicated trucking services. Its airport-to-airport network provides scheduled deliveries to 61 service points, with a fleet of roughly 525 independent contractors providing linehaul services between those points. Towne had unaudited revenue of approximately $230 million in 2014, said Forward.

Forward Air CFO and Senior Vice President Rodney Bell told LM that Towne is a great fit for Forward.

“They operate a deferred air network much like ours,” he said. “This will increase our lane density while reducing costs through significant synergies. Additionally, we get a significant number of owner-operator drivers. In this tough driver environment that is huge.”

Towne’s cartage expertise should Forward to accelerate its Forward Air Complete pick-up and delivery service offering, Bell said, adding Forward will also will take on Towne’s dedicated white gloves service offering, which he said is an area that Forward has been looking to get into. And he added that through this deal Forward will pick up four brand new airport-to-airport markets where it had a limited presence.

When asked about what the biggest benefits of bringing Towne into the fold are for Forward customers, Bell cited several, including: availability to capacity and continuing the superior scheduled service that it always provided; accessibility to its growing suite of transportation service offerings; scheduled- expedited LTL; expedited FTL; pick up and delivery, intermodal, temperature control pharma, pooled distribution, and value added accessorial services.

In early February, Robert W. Baird & Co. analyst Benjamin Hartford wrote in a research note that it stands as a “potentially transformative acquisition” for Forward, as Towne was the largest competitor in Forward’s core time-definite airport-to-airport business.