Landstar to sell supply chain subsidiaries for $87 million
Over the past four years, we have come to believe that LSCS is better suited for a company store type operation rather than Landstar's core agent-based model, says Landstar Chairman, President and CEO Henry Gerkens. (Courtesy: LANDSTAR)
The Trucker News Services
JACKSONVILLE, Fla. — Landstar System, a worldwide, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation logistics services, announced Wednesday that it has signed a definitive agreement to sell its Michigan-based supply chain subsidiaries (LSCS) to XPO Logistics for $87.0 million in cash.
The Landstar Board of Directors also has declared a special one-time dividend in the amount of $0.35 per share, payable on Jan. 16, 2014, to shareholders of record on Dec. 27, 2013, and has increased the number of shares of Landstar common stock the company is authorized to purchase from time to time on the open market or otherwise to three million shares.
The transaction is anticipated to close late in the 2013 fourth quarter or early in the 2014 first quarter pending Hart-Scott-Rodino clearance and the satisfaction or waiver of certain other customary closing conditions.
The purchase price is subject to customary post-closing adjustments. The sale is expected to result in an estimated after-tax gain on sale of approximately $32 million or approximately $0.71 per diluted share and is expected to generate approximately $50 million in additional cash to Landstar, after estimated working capital adjustments.
For the 2012 fiscal year, LSCS generated earnings before interest, taxes, depreciation and amortization ("EBITDA") of $7.3 million.
Landstar's LSCS supply chain operations were created by Landstar's contemporaneous but separate acquisitions in 2009 of (1) Premier Logistics, Inc., which included National Logistics Management ("NLM") and Interactive Capacity Gateway LLC, and (2) A3 Integration, LLC ("A3i"). After the closing of the sale of these companies to XPO, Landstar will maintain offices in the Southfield/Detroit area to continue its more than 25 year history of providing safe, reliable transportation services and capacity solutions to its automotive customers.
"This transaction offers Landstar and its stockholders an excellent return on the two investments the company made in 2009,” Landstar Chairman, President and CEO Henry Gerkens said. “Over the past four years, we have come to believe that LSCS is better suited for a company store type operation rather than Landstar's core agent-based model."
Landstar's overall strategy and focus will continue to include growing our core business model by investing in technological solutions and businesses that support and expand our agent, customer and third party capacity provider base, Gerkens noted.
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