Ryder expands in Europe with acquisition of Hill Hire plc
June 08, 2011
Freight transportation and logistics services provider Ryder System said today it has acquired Hill Hire plc, a Bradford, England-based provider of commercial truck leasing, rental, and maintenance services, and an independently run and wholly owned subsidiary of Lloyds Banking Group.
The purchase price was roughly $252 million, according to Ryder officials.
Ryder said this acquisition is expected to add roughly $147 million in annual revenue to Ryder’s Global Fleet Management Solutions (FMS) unit and be accretive to 2011 Ryder earnings. And the company also said that upon completion of the acquisition, the combined Ryder and Hill Hire business will operate under the Ryder name.
In terms of assets, Ryder said that bringing Hill Hire into the fold adds:
-approximately 4,000 heavy duty vehicles, split evenly between contract hire (full service lease) and commercial rental;
-ancillary equipment including a large trailer fleet for contractual lease and rental;
-the company’s workforce of 300 employees including maintenance technicians; and
-all of Hill Hire’s 13 well-equipped vehicle maintenance facilities located throughout the UK.
In an interview with LM Ryder Executive Vice President and Chief Financial Officer Art A. Garcia said that there were multiple drivers for this deal.
“Our current business in Ryder Europe, which is primarily UK-based, is about $220 million in revenue in 2010, with this acquisition adding about $150 million annually,” said Garcia. “In our current book of business, our focus has been around light-duty and medium-duty trucks, with Hill Hire focusing on heavy-duty trucks and tractors. We see this as a nice compliment to our existing business.”
When asked how acquiring Hill Hire benefits shippers, Garcia explained that it expands the geographic presence of Ryder’s existing network and brings together more full-service truck leasing company, with light-duty and medium duty trucks.
With Hill Hire’s roughly 4,000 trucks now part of Ryder, Ryder Europe now has roughly 12,000 trucks.
In recent months especially, Ryder has been quite active on the acquisition front, acquiring Total Logistic Control and The Scully Companies in January. Garcia said that Ryder will continue to remain active in vetting acquisition opportunities, with its focus on the core markets it serves in the United States, Canada, and the United Kingdom from a leasing and rental perspective.
But from a supply chain perspective, Ryder’s focus is on North America, with a big presence Canada, coupled with growing its abilities and services from Asia to the U.S.
“For our FMS and supply chain businesses, the focus is on those three markets,” said Garcia. “And from an acquisition perspective, that is where you may expect to see anything we do.”
David Hunt, Vice President and Managing Director, Fleet Management Solutions, Ryder Europe, said, “Hill Hire is a well respected and successful business serving the needs of national blue chip customers. The acquisition accelerates our growth strategy by expanding our fleet offering in the heavy duty vehicle contract hire (full service lease) and rental market, as well as our customer base in a sector that we have targeted for expansion.”
Mr. Hunt continued, “There are tremendous benefits in bringing the two businesses together. Hill Hire’s heavy duty vehicle fleet, which comprises 60% tractors, complements our existing fleet, which consists primarily of light and medium duty trucks. Combined, we will be able to provide expanded fleet choices and value for customers with additional payload and vehicle specification options to further strengthen the Ryder offering. Additionally, Hill Hire’s UK service facility network will enhance the geographic reach of our business, to better serve the needs of new and existing customers of the combined companies. Our Ryder team looks forward to delivering enhanced value to our customers through expanded resources and fleet options that will drive higher levels of efficiency into their transportation operations.”
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