Transit Group Gets $25 Million From GE

Transit Group picked up more support for its truckload consolidation strategy from GE Equity, a private investment arm of General Electric Co.

The deal represents the first direct investment by GE Equity in stock of a trucking company.

Atlanta-based Transit Group, which has acquired 14 truckload carriers over the past two years, issued 5 million shares of convertible preferred stock to GE for $25 million.

A portion of the stock can be converted into common stock after three years.

President Philip A. Belyew said the funds will increase the company's capital base by about 50% to more than $75 million and will allow Transit Group to continue using cash-and-stock combinations to make acquisitions.

Transit Group currently has 26 million common shares outstanding.

At their annual meeting May 12, Transit Group stockholders voted to increase the number of authorized common and preferred shares to 100 million and 30 million, respectively.

Belyew said the relationship with GE "signals strong outward support for our corporate strategy."

Transit Group already has a $50 million equipment line of credit with GE Capital Services. GE Capital owns a 79% stake in Penske Truck Leasing Co. and owns trailer lessor Transport International Pool. The company also has significant interests in auto fleet leasing, railcar repair, aircraft and satellite equipment leasing, modular office buildings and is a 50-50 partner with Sea Containers to lease ocean freight containers.

Commenting on GE's interest in Transit Group, Belyew said: "We recognize the confidence they place in our company, its management and its future."

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