LTL Vitran Accepts Offer From TransForce to Buy Canadian Assets at $6.50 Per Share
This story appears in the Jan. 6 print edition of Transport Topics.
TransForce Inc. is now in line to acquire the remaining Canadian assets of Vitran Corp., after the seller accepted a $6.50-per-share offer that topped an earlier bid from Manitoulin Transport Inc., another Canadian carrier.
Toronto-based TransForce announced the agreement on Dec. 30, 12 days after it submitted an offer that was higher than Manitoulin’s. Both Vitran and TransForce have less-than-truckload operations.
Vitran, also based in Toronto, had agreed to be acquired by Manitoulin for $6 per share on Dec. 10, while leaving the door open for a higher offer.
The announcement was the latest in a series of moves by Vitran. In September, the company agreed to sell its loss-plagued U.S. LTL unit. That sale was completed in October, as Michigan trucker Matthew Moroun paid $2 million for that business.
In contrast, Vitran’s Canadian operation is profitable, earning $1.4 million during the third quarter to nearly double the profit in the 2012 period.
“We are delighted to have reached agreement with Vitran for what represents the acquisition of an important strategic asset for TransForce with considerable synergistic benefits in the near term and into the future,” Alain Bédard, CEO of TransForce, said in a statement. “We are looking forward to leveraging the strengths of both companies to enhance our service offering for our customers.”
TransForce already has LTL operations whose $162 million third-quarter revenue more than tripled the $49.4 million at Vitran.
The buyer’s strategy includes a steady stream of acquisitions, including two made last year. TransForce also has concentrated on trimming costs, such as moves to close 73 service centers in a 12-month period across the package, courier and LTL businesses.
Vitran also announced that Manitoulin declined to match the higher offer and that a $4 million termination fee would be paid to Manitoulin.
TransForce’s offer was valued at $136 million, or $8 million more than the offer from Manitoulin, which also is based in Ontario.
TransForce in September made a $4.50-per-share offer for Vitran’s Canadian assets, but the deal wasn’t completed. Instead, Vitran created a shareholder rights plan blocking any firm from buying more than 20% of its shares.
TransForce currently owns 19.95% of Vitran’s stock. It agreed to take on $29 million in Vitran debt.
TransForce ranks No. 8 on the Transport Topics Top 100 list of the largest for-hire carriers in the United States and Canada. Vitran ranks No. 40.
Shareholders of Vitran are expected to meet in February to vote on the TransForce offer, the buyer’s statement said.
The deal still can be called off if Vitran receives an unsolicited higher bid, TransForce said, though the buyer has the right to preserve its purchase by matching another offer.
