Vitran completes acquisition of Milan’s LTL operations
February 22, 2011
Editor’s note: This story has been updated with additional information.
Freight transportation and logistics services provider Vitran Corporation Inc. said it has officially closed its purchase of the assets of Milan Express’ less-than-truckload (LTL) division.
Financial terms of the deal, which was initially announced on January 14, were not disclosed. But Vitran officials said thatfFor the year ended December 31, 2010, Milan had revenues of $70.0 million through its 11 state region, and Vitran purchased all the rolling stock and other equipment of Milan. Vitran expects an accretive impact on its FY 2011 diluted earnings as a result of the acquisition, according to the officials.
Milan provides regional LTL services in the central and southern regions of the United States. By bringing Milan into the fold, Vitran gains 16 terminals in new markets, including Alabama, Georgia, Mississippi, North Carolina, and South Carolina.
Vitran officials said that the company will also operate two additional facilities to expand its pre-existing footprint in Chattanooga and Jackson Tennessee.
“We are extremely pleased to welcome both Milan’s employees and customers to the Vitran family,” said Vitran President and Chief Executive Officer Rick Gaetz in a statement. “We are delighted to introduce the states of Alabama, Georgia, Mississippi, North Carolina and South Carolina as new territory within Vitran’s North American LTL freight network. This important acquisition expands our reach as we continue to press forward with our goal of complete LTL coverage throughout both Canada and the United States. As with our other acquisitions, we will begin systematically cross-selling our premium regional, inter-regional and cross-border services to our combined customers in the near future. We look forward to maintaining the Ross family commitment to the region.”
And in an interview with LM, Gaetz said that this deal represents Vitran’s sixth LTL acquisition in the United States, adding that Vitran’s strategy is to build out a North American—U.S. and Canada—LTL infrastructure.
This effort, he explained, will be done by providing complete coverage in Canada and continuing to expand the company’s U.S. footprint.
“The attraction that Milan brought us was five additional states in the southern region of the U.S.,” said Gaetz. “In the overlapping markets, it improves our density and gives us five additional states to leverage our new customers and legacy customers into and out of.”
With the LTL sector particularly active in the southern U.S., coupled with stiff competition from several industry players, Gaetz said that Vitran has an opportunity to offer more geographic coverage to shippers every time its trucks back up to their dock doors. What’s more, he noted that Vitran has had success leveraging its customers in the past, and he expects that if Vitran meets or exceeds their expectations then it will have an opportunity to go deeper into their supply chains.
BB&T Capital Markets Managing Director Thom Albrecht wrote in a research note that acquiring Milan’s LTL business should Vitran’s density in the Central states, while existing customers might give more business to Vitran given their enhanced geographical coverage.
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