Late last month, C.H. Robinson Worldwide Inc. announced its acquisition of the Prime Distribution Services business from Roadrunner Transportation Systems Inc. C.H. Robinson paid $225 million to acquire the carrier and incorporate it into its distribution network.
Prime, of Plainfield, Ind., offers retail consolidation service, including distribution, fulfillment and inventory management to approximately 140 customers. The company was founded in 1990 and manages five fulfillment centers across the country, including 270 employees and 2.6 million square feet of distribution facilities. Prime’s 2019 revenue was $108.7 million.
C.H. Robinson CEO Bob Biesterfeld stated in a press release, “Prime Distribution Services is a high-quality growth company that brings scale and value-added warehouse capabilities to our retail consolidation platform, adding to our global suite of services.”
From Roadrunner Transportation System’s perspective, the sale of Prime will allow the company to move forward with financial confidence. “The divestiture of Prime Distribution Services is a unique opportunity for us to significantly improve our balance sheet,” Roadrunner CEO Curt Stoelting said. “We believe we are well-positioned to execute our strategy of simplifying our portfolio by investing in our remaining Ascent Global Logistics, Active On-Demand and asset-light less-than-truckload segments.”
C.H. Robinson, based in Eden Prairie, Minn., has over $20 billion of freight under its management and processes 18 million shipments annually.
The sale is not Roadrunner’s only effort to change its business model in light of a 2017 accounting scandal and weakening freight demand in 2019. In December, Roadrunner sold its flatbed business unit for $30 million in cash to an undisclosed buyer. A month prior, the company announced the sale of its intermodal business to Universal Logistics Holdings for $51.25 million in cash.
Biesterfeld, in his comments on the acquisition, said, “Prime has an outstanding track record of success, a talented and experienced team and a focus on delivering great value to its customers and carriers.” The acquisition will integrate Prime into C.H. Robinson’s North American Surface Transportation division following the sale’s closing, expected by March 31.
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