Forward Air to purchase Central States Trucking for $95 million
Forward Air Chairman, President and CEO Bruce A. CampbelFor a number of years we have had the desire to enter the drayage space via purchase of a company with a scalable platform. (The Trucker file photo)
The Trucker News Services
GREENEVILLE, Tenn. — Forward Air Corp. Friday announced that it has signed a definitive agreement to acquire all of the stock of Central States Trucking Co. and Central States Logistics (CST), from Central States Inc.
Founded in 1980, CST provides industry leading container and intermodal drayage services primarily within the Midwest region of the United States. CST also provides line-haul service within the airport-to-airport space, as well as, dedicated contract and Container Freight Station (CFS) warehouse services.
CST has a seven terminal network with approximately 500 office employees and drivers. Headquartered in Bensenville, Ill., CST had 2013 unaudited revenues of approximately $66 million. The purchase price will be $95.6 million, which is approximately eight times 2013 adjusted EBITDA. CST will be acquired on a cash-free, debt-free basis with an adjustment for working capital. Forward Air also anticipates approximately $15 million in net present value of expected cash tax savings as a result of the transaction. The transaction will be funded by Forward Air’s cash reserves and is expected to be accretive to its 2014 earnings.
The closing of the transaction is subject to various customary conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and compliance with the covenants and agreements in the definitive agreement in all material respects. It is anticipated that the transaction will close in the first quarter of 2014.
“We are extremely pleased to join the Forward Air team,” Bryan Grane, president and CEO of CST, said. “We feel that combined with Forward Air’s strengths in expedited linehaul and final mile LTL solutions, our new partnership will allow CST to more quickly achieve our corporate vision to be the market leader in international supply-chain trucking and warehousing. With the combined entity offering over 90 terminals and 40 CFS stations, we will be able to provide our international air and ocean customers with greater supply-chain flexibility, scale and continuity.”
“We are very excited about the acquisition of CST.” Bruce A. Campbell, chairman, president and CEO of Forward Air, said “For a number of years we have had the desire to enter the drayage space via purchase of a company with a scalable platform. CST not only provides that platform, but does so while achieving the high margins and low asset intensity that our shareholders have come to expect from us. “Over time, we feel confident that Bryan and his team of seasoned transportation professionals will give us the ability to duplicate their approach to the drayage space on a nationwide scale.”
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