Canadian parcels and freight group TransForce has agreed to buy US courier firm Velocity Expressto further expand in the North American package and courier market.
The Montreal-based company said it has entered into a definitive agreement and plan of merger toacquire all the shares of Velocity Express (“Velocity”) and its subsidiaries. The transaction isexpected to generate annual revenues of approximately $160 million for TransForce and should closeby the end of January 2013.
Headquartered in Stafford, Texas, Velocity operates a network of more than 80 locations acrossthe United States and Western Canada, employing a combined total of approximately 2,600 staff andindependent contractors. Velocity is an important provider of customized, same-day regionaldelivery solutions, offering an extended range of services in delivering packages of any size.
“The acquisition of Velocity further enhances TransForce’s density in the same-day NorthAmerican package and courier market and reflects our disciplined and selective approach in buildingour network. A trusted provider of customized, same-day regional delivery services in the UnitedStates for nearly 20 years, and a well-established player in Western Canada. The transaction willbe accretive for TransForce and will provide a sound return on investment to the benefit of ourshareholders,” said Alain Bédard, Chairman, President and Chief Executive Officer ofTransForce.
The Velocity deal follows TransForce’s acquisitions of US courier Dynamex, Canadian parcels firmLoomis Express (the former DHL Express Canada domestic package business) and several freightoperators in recent years.
In 2011, TransForce increased total revenue by 34% to $2.7 billion, driven by acquisitions, andimproved EBIT by 29% to $186.4 million. The Package and Courier division closed 2011 with revenuesof $971 million, EBIT of $60.6 million and a 6.2% profit margin. TransForce is due to release itsQ4, 2012 and full year results on March 1, 2013.
