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Ryder completes acquisition of The Scully Companies Inc.

By Jeff Berman, Group News Editor
February 02, 2011

Following a December announcement in which it indicated it had reached an agreement to acquire the full service lease, contract maintenance, commercial rental and dedicated contract carriage businesses of Fontana, California-based The Scully Companies Inc., freight transportation and logistics services provider Ryder System said this week the deal has been made official.

Ryder officials said that this acquisition is expected to add roughly $100 million in annualized operating revenue and be accretive to 2011 earnings. And they added that about 35 percent of Scully’s revenue is related to the commercial truck leasing, maintenance, and rental business, with 65 percent related to its dedicated contract carriage business.

Scully’s fleet management business is comprised of approximately 1,800 full service lease units and 300 rental vehicles, and approximately 200 contract customers primarily served from its six service facilities. Scully’s five California-based service facilities are in Fontana, Sacramento, City of Industry, Montebello, Hayward, along with a location in Phoenix, Ariz. And Scully’s dedicated contract carriage business is comprised of
customers served from 25 locations throughout the western United States.

Ryder officials said that Scully’s leasing maintenance and rental services will now be part of Ryder’s Fleet Management Services (FMS) group and its dedicated contract carriage business will become part of Ryder’s Dedicated Contract Carriage group.

A Ryder spokesperson told LM there were multiple drivers for making this deal.
When asked how long Ryder has been looking to expand its FMS presence out West, the spokesperson said it is always looking to expand and grow its FMS business in all geographies, adding that “tuck in” acquisitions like this one are an efficient way for Ryder to leverage existing capacity, add selective new locations to strengthen its market
position, and add strong customers and operations management to its, which have been and will continue to be an important component of its growth strategy.

“The biggest competitive advantages [of this deal] relate to adding a strong customer base, additional infrastructure in key geographies (both sides of the business),
and strong management talent with specific insight and experience in these
markets,” said the spokesperson.

Robert W. Baird & Co. analyst Jon Langenfeld wrote in a research note that acquiring Scully expands Ryder’s footprint in the western U.S. and its full service fleet, which grew by an average of 1.4 percent annually during the previous cycle and contracted 8 percent from the peak during the first quarter of 2009, by 2 percent. He added that these types of small tuck-in lease fleet acquisitions can support Ryder’s ability to return to previous peal fleet size during the upcoming cycle.

This acquisition follows a previous announcement in which Ryder announced its plans to acquire Total Logistic Control, a subsidiary of SUPERVALU and a provider of supply chain services for shippers in the food, beverage, and consumer packaged goods sectors.

“We are very pleased that Ryder’s strong balance sheet has enabled us to acquire a reputable company with a solid track record and strong commitment to serving customers,” said Ryder Chairman and Chief Executive Officer Greg Swienton in a statement.  “This acquisition strengthens Ryder’s leadership in the western United States, and increases our customer base in the retail industry for Dedicated Contract Carriage services.  We look forward to expanding our network and bringing new approaches, innovation, and additional service offerings to customers of our newly combined organization.”

For more articles on Ryder System, please click here.




About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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