Ryder preps to acquire Total Logistic Control

Freight transportation and logistics services provider Ryder System said it has inked an agreement 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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Freight transportation and logistics services provider Ryder System said it has inked an agreement 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. 

Company officials said Ryder will acquire TLC for cash under a stock purchase agreement, adding that this acquisition is expected to add roughly $250 million in annual revenue to Ryder’s Supply Chain Solutions (SCS) business unit and is expected to close on December 31, 2010, pending closing conditions and regulatory approvals.

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.

“This strategic acquisition is an exact fit with our strategy of developing a leading CPG capability and strengthening our focus in key vertical industry sectors,” said John Williford, Ryder’s President of Global Supply Chain Solutions, in a statement. “By bringing the TLC organization and operations over to Ryder intact, we are able to immediately deliver best in class supply chain solutions to a broad range of new and existing food, beverage and CPG clients. Going forward, we will build on TLC’s proven and highly regarded packaging and temperature-controlled warehousing capabilities by integrating client solutions using Ryder’s well-established strengths in Dedicated Contract Carriage, Transportation Management, lean operational execution and logistics engineering. We look forward to providing clients with innovative solutions in Ryder’s new CPG vertical industry group.”

And 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.”

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About the Author

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. Contact Jeff Berman

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