Canadian express and logistics group TransForce has completed the takeover of US express firmVelocity Express and bought a small stake in a Canadian trucking firm as it continues to grow
through acquisitions.The Montreal-based group said it has completed the acquisition of all the shares of VelocityExpress and its subsidiaries. The deal, which was announced last month, is expected to generateadditional annual revenues of approximately $160 million and contribute positively to TransForceprofits.
“This asset-light acquisition further enhances TransForce’s density and capabilities in thesame-day North American package and courier market. We welcome Velocity’s employees and independentcontractors to the growing TransForce family. The combination of our skills and know-how creates amore powerful service offering in this market niche. We expect the transaction to provide a soundreturn on investment to the benefit of our shareholders,” said Alain Bédard, Chairman, Presidentand Chief Executive Officer of TransForce.
Velocity operates a network of more than 80 locations across the United States and WesternCanada, employing a combined total of approximately 2,600 staff and independent contractors.Velocity is an important provider of customised, same-day regional delivery solutions, offering anextended range of services in delivering packages of any size.
TransForce has already expanded its courier and package business substantially in the last fewyears with the acquisitions of US courier Dynamex and Canadian parcels firm Loomis Express (theformer DHL Express Canada domestic package business).
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.
Meanwhile, TransForce has taken a small stake in a Canadian regional operator in the freighttrucking sector where it has also made several acquisitions in recent years. It bought 10.75% ofthe shares of Vitran Corp on the Toronto Stock Exchange between December 17 and January 24 for atotal of C$9.1 million. TransForce said it might buy further shares in the future and potentiallytake control of the company.
Vitran provides LTL trucking services, rail freight transportation and various logisticsservices through various subsidiaries throughout Canada and in 34 states in the eastern, central,southwestern and western United States. In 2011 it had annual revenues of $806 million, up 20%, butmade a net loss of $14 million following a $38 million loss the previous year.
