Ryder finalizes acquisition of Total Logistic Control
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Following December’s announcement that it planned 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, freight transportation and logistics services provider Ryder System said today the deal is now official.
Ryder officials said that the stock acquisition of the deal was completed in December 31, 2010 for roughly $200 million.
TLC provides various services for shippers, including distribution management, contract packaging services, and solutions engineering, working with customers on a local, regional, national, and international basis for food and beverage manufacturing, consumer and wholesale distribution. The company operates 34 facilities comprising 10.6 million square feet of dry and temperature-controlled warehousing in 13 states and has 2,500 employees.
Ryder said this deal is expected to add roughly $250 million in annual revenue to the company’s Supply Chain Solutions (SCS) unit, with TLC’s executive team and staff remaining in place as part of what will be called Ryder Supply Chain Solutions’ consumer packaged goods industry group.
Ryder Chairman and CEO Greg Swienton said in a statement that this acquisition sets Ryder up to enable it to accelerate its capabilities and growth prospects in a high potential industry sector that it has been targeting for expansion.
And Ryder President of Global Supply Chain Solutions John Williford told LM in an interview that Ryder has been targeting both the retail and consumer packaged goods (CPG) segments of 3PLs for the past few years.
“CPG is the largest segment of the 3PL market, and we have not been a big player there,” he said. “We think our skills can make a difference there. We have been looking to build up our CPG vertical industry group for two years, and we have been looking at how to do that through acquisition and organically.”
Ryder started a CPG and retail industry group in 2008 and was starting to make some traction, with customers reacting favorably to the group’s capabilities, said Williford, but at the same time Ryder was looking at acquisition candidates in the sector to speed things up. But the company did not find the ideal candidate until TLC came into the mix.
TLC’s expertise in CPG-related logistics and specialized services in that space, including temperature-controlled warehousing and both primary and secondary packaging services, coupled with campuses geared toward CPG customers, were identified as some of the driver’s for Ryder’s interest in TLC, said Williford.
“Those are all the kind of things we were looking for…while looking at the CPG space,” he said. “And we liked their management team, culture, and people at TLC, as well as their blue chip list of customers with whom they have great relationships.
As a new addition to Ryder’s SCS business unit, TLC brings relationships with 1,000 Fortune 1000 clients into the fold that are in the food, beverage, and CPG sectors, which Ryder’s SCS unit has targeted for growth and complements the automotive, high-tech, industrial and retail sectors SCS already serves, according to the company.
A leading 3PL expert told LM that this deal makes sense on multiple levels for Ryder.
“Acquiring TLC provides Ryder with an increased Food & Grocery vertical industry customer base and additional value-added warehousing and contract packaging capabilities,” said Evan Armstrong, president of supply chain consultancy Armstrong & Associates. “TLC has significant dedicated contract manufacturing and primary/secondary packaging operations. Its food industry customers include: Birds Eye, Campbell’s, ConAgra Foods, Dean Foods, Diageo, General Mills, Kellogg’s, Kraft Foods, PepsiCo, Ocean Spray, and Sara Lee. While it originally saw significant synergies in acquiring TLC, Supervalu has since refocused its business on grocery retailing leaving little strategic support to grow its 3PL operations.”
According to Armstrong & Associates research, TLC had 2009 net revenues of $252 million, employs approximately 2,500 people, and has a domestic network of
29 warehouses with approximately 9.1 million square feet of space. And of its warehouses, 79% are dedicated (single client) operations and 21% are multi-client, with 40 percent of the operations having some temperature-controlled space: 35% having freezer/refrigerated capacity and an additional 5% having air-conditioned space.
About the AuthorJeff Berman 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. Contact Jeff Berman
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