Transplace acquires SCO Logistics

Non asset-based third-party logistics (3PL) services provider Transplace said today it has acquired Philadelphia-based SCO Logistics, a 3PL serving the chemical industry.

Financial terms of the deal were not disclosed.

SCO Logistics has roughly 15 customers and about 40 employees. Its primary service offering is a full suite of supply chain technology platform for chemical shippers comprised of software-as-a-service, shipment planning and execution, and transportation management systems, focusing on reducing logistics costs, and improving supply chain visibility.

In an interview with LM, Transplace President and CEO Tom Sanderson explained that since his tenure at the company began in 2003 Transplace has been making an effort to get into the chemical sector with no success.

“We have wanted to get into this space for a number of years, but under our prior ownership we did not have the capital to go out and look at acquisitions,” said Sanderson. “But with our buyout of the former owners in partnership with CI Capital in December 2009, we have the capital now to look into spaces that are attractive that we might want to be in. SCO has a great team, and this is a great opportunity for us to get into a new business.”

When asked how SCO Logistics will mesh with Transplace and what the acquisition will bring to the table, Sanderson said SCO’s strong team and northeast presence will be a boon for the company.

The intent going forward will be to grow and leverage SCO’s Philadelphia presence to continue serving shippers in the chemical industry and the other sectors Transplace serves.

“There is no reason not to have a CPG, retail, or manufacturing customer served out of the Philadelphia office,” said Sanderson. “That would be great for our customers, as all of SCO Logistics employees will become Transplace employees. By no stretch of the imagination are we looking at this as a cost-cutting exercise; this is a revenue growth opportunity.”

SCO Logistics President and CEO Frank McGuigan said that his company has been approached in the past as an acquisition target, but the timing and the immediate comfort level between all parties is what ultimately made this a deal a success.

He said the “timing” was right all around, with Transplace calling at the right time and SCO having a plus-20 percent growth rate over the last four years. “We were getting to the point where we needed to increase the velocity of our growth. Our Board was considering all options including increased investment when Transplace first reached out to us.

“From a customers’ perspective, they are thrilled about this” said McGuigan. “Transplace is probably the most important player in this [3PL technology services] space and is a great fit. The service offering and customer focused culture are a perfect match. Further, the continued evolution of the needs of our customers will ultimately be better served by Transplace especially in the areas of International Freight Management, Supply Chain Engineering, and Cross-border operations into Mexico.

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