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

Toronto-based less-than-truckload 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.

By ·

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, 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

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!

Article Topics

LTL · Vitran Corporation · All Topics
Latest Whitepaper
Managing Global Transportation: How NVOCCs can operate more profitably
Global transportation isn’t getting any easier to manage. With new rules and regulations to learn, new compliance requirements to adhere to, and new customers and business partners to onboard, navigating the complexities of the global market can be difficult for any company. To fully leverage their global supply chains, firms need a robust, global transportation management system that helps them navigate this ever-changing environment.
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo