Ryder preps to acquire The Scully Companies Inc.
December 21, 2010
Freight transportation and logistics services provider Ryder System recently announced it has 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.
Financial terms of the acquisition were not disclosed, but Ryder officials said that it is expected to be finalized in late January.
Ryder officials said the company will acquire Scully’s fleet management business consisting 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, which Ryder is also acquiring, is comprised of
customers served from 25 locations throughout the western United States.
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.
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