Subscribe to our free, weekly email newsletter!


Vitran sells off rest of its business to Manitoulin Transport Inc.

By Jeff Berman, Group News Editor
December 10, 2013

Toronto-based less-than-truckload (LTL) carrier and transportation services provider Vitran Corporation Inc. announced this week that it has entered into a definitive agreement to be acquired by Manitoulin Transport Inc., a Pembroke, Ontario-based provider of LTL transportation services.

Vitran officials said that Manitoulin will acquire all of the issued and outstanding shares of Vitran for $6 per share, with the total transaction, including the assumption of Vitran’s outstanding net debt of $29 million, valued at roughly $128 million. 

“We are extremely excited to join with Manitoulin Transport to leverage the operational strengths of both companies,” said Vitran Interim President and Chief Executive Officer, William Deluce in a statement. “Together Vitran and Manitoulin Transport will become a formidable and diversified supplier for customers requiring a full suite of transportation and supply chain services in Canada and the United States. We are extremely pleased that this transaction will provide our shareholders significant and immediate value for their shares. We thank each and every one of our Vitran employees for their efforts and steadfast commitment to Vitran and wish them nothing but the best in the future.”

This announcement follows the completion of the October sale of Vitran’s United States-based less-than-truckload business, which was initially announced in late September.

The business was acquired by Matthew Moroun, vice chairman of Warren, Mich.-based LTL carrier Central Transport International and an industry veteran associated with various transportation industries, including: LTL, TL, flatbed, 3PL, and warehousing.

Vitran said that under the terms of the agreement Moroun acquired 100 percent of the common stock of the wholly-owned U.S. subsidiary, which owns Vitran’s U.S. LTL business. And the company said it capitalized the U.S. LTL business with the net amount of $3 million (U.S.), after deducting the $2 million (U.S.) purchase price received by Vitran from the purchaser. Vitran added that Moroun funded a cash deficit of approximately $1.4 million (U.S.) in the U.S. LTL business between September 23, 2013 and the time of closing.

In late September, when this deal was first announced but not completed, Deluce said that for the last several years, Vitran has invested substantial time and capital to improve its U.S operating results. And while it maintained these efforts have made Vitran’s U.S. LTL business a better operating company, they did not result in financial results that are acceptable to management or its Board.

Deluce, a Vitran board member, replaced Rick Gaetz, whom resigned as president and CEO and a Director of the company in early April. Deluce has been the CEO and a director of various corporations and that Vitran’s Board said in April that this experience combined with his history as a successful entrepreneur, made him well suited to serve as interim President and Chief Executive Officer.

Last March, Vitran completed the sale of its Supply Chain Operation (SCO)  unit to Portsmouth New Hampshire-based third-party logistics (3PL) services provider Legacy Supply Chain Solutions for $97 million.  When that deal was made official, Vitran said it intended to use a portion of the net proceeds from the transaction to fully reduce its outstanding debt under its senior revolving credit facility, and will have approximately $50.0 million of remaining cash on the balance sheet. SCO accounted for 14 percent of the company’s revenue, former CEO Gaetz told LM in March.

Following that deal, Stifel Nicolaus analyst David Ross wrote in a research note that “Vitran continues to be a big potential turnaround story,” explaining that following sale of SCO it had “plenty of financial breathing room and capital available…to execute a turnaround.”

In late September Vitran said that it received an unsolicited, non-binding proposal and letter of intent from TransForce Inc., a Montreal-based transportation staffing agency, in which TransForce proposed to acquire all of the issued and outstanding common shares of Vitran not already owned by TransForce for $4.50 per share, with TransForce currently controlling 9.51 percent of the outstanding common shares of Vitran.

About the Author

Jeff Berman headshot
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. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Even though some of its key metrics dropped sequentially from August to September, the outlook for manufacturing over all remains strong, according to the most recent edition of the Manufacturing Report on Business issued today by the Institute for Supply Management (ISM).

Company officials said that these planned changes, which will take effect on January 4, 2015, will provide for increases in current pay rates and reduce the time it takes for its nearly 15,000 drivers to reach top pay scale.

While the economy has seen more than its fair share of ups and downs in recent years, 2014 is different in that it could be the best year from an economic output perspective in the last several years. That outlook was offered up by Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics Report at last week’s CSCMP Annual Conference in San Antonio.

Matching last week, the average price per gallon of diesel gasoline dropped 2.3 cents, bringing the average price per gallon to $3.755 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

A number of key topics impacting the freight transportation and logistics marketplace were front and center at a panel at the Council of Supply Chain Management Annual Conference in San Antonio last week.

Article Topics

News · LTL · Vitran Corporation · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA