TransForce Acquires Vitran

TransForce’s insatiable thirst for acquisitions continues.

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By:  Cameron Conway

On December 30, 2013 Quebec based trucking and shipping leader TransForce (TSX:TFI) announced that they had entered into an agreement to purchase all issued and outstanding shares of Vitran (TSX:VTN, NASDAQ:VTNC). A provider of “less than truckload” (LTL) and intermodal services.

TransForce, who currently owns 19.95% of Vitran, beat out a $6.00/share offer tabled by Ontario based Manitoulin on Dec 9, 2013. Offering $6.50/share or US$136 million, Transforce sweetened the pot by offering an 11.6% premium on Vitran’s Dec 9, 2013 closing price. Manitoulin did not match.

The Portfolio Keeps on Trucking

Since 1992 TransForce has completed over 35 takeovers just in their courier division. The purchases have included companies such as U.S. based Dynamex, Loomis Express, ICS Courier, the Canadian assets of DHL, and ATS Retail Solutions.

Add that to this 23 “truckload” companies, 7 “less than truckload” companies, and another 21 “specialized services” companies and you’ve got yourself a serial acquirer/consolidator in the North American trucking space. Vitran is a natural fit into the TransForce portfolio as it continues to grow as Canada’s top publicly traded shipping company.

A conclusion that fell off the back of the truck

This deal has already been approved by Vitran’s board of directors and a shareholder meeting is expected to be held in February. TransForce expects to put an end to the rocky road of buy, sell, buy and resell Vitran has experienced the last few years. Ideally a sense of stability will be brought to this nationwide shipping fleet for the benefit of TFI’s owners.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cameron Conway does not own any of the shares mentioned in this report.  The Motley Fool does not own any shares mentioned in this report.

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