One of the biggest Canadian fleet acquisitions in many years took place last night as TransForce announced plans to buy Contrans for roughly $500 million.
TransForce is Canada’s largest parent company of motor carriers while Woodstock, Ont.-based Contrans is also a top 10 national carrier in terms of fleet size and recognized as of the largest specialized transportation service providers.
Both carriers are Ontario Trucking Association members whose management are significantly involved with the OTA board.
“I have admired the progress of Contrans for some time,” said Alain Bédard, chairman, president and CEO of TransForce. “Contrans has a culture similar to that of TransForce, strategically acquiring companies that add value for its shareholders.
“Contrans has a history of profitability, is financially sound and has seen steady growth over the years. From transportation facilities located mostly in Canada, Contrans offers customers a wide array of specialized services. This acquisition provides exciting potential for TransForce, adding strong resources, an excellent client base, and importantly, very strong management.”
In a press release, TransForce announced they have entered into a Support Agreement for $14.60 in cash per share, of all of the issued and outstanding Class A subordinate voting shares and Class B multiple voting shares of Contrans by way of a “friendly, Board-approved take-over bid. The total equity purchase price is approximately $495 million.
The Board of Directors of Contrans, after consultation with its financial and legal advisors, has unanimously approved entering into the Support Agreement and unanimously recommends that Contrans shareholders tender their shares to the Offer.
“TransForce has a significant market presence that will benefit our operations and possesses many of the same values that have allowed Contrans to operate successfully,” said Stan Dunford, chairman and CEO of Contrans. “I believe the entrepreneurial culture of Contrans will fit in well with TransForce. I am proud of Contrans’ management’s accomplishments over the past 25 years and look forward to seeing the team continue to flourish as part of the TransForce organization.”
The Offer is expected to commence on or about August 21, 2014.
Following successful completion of the Offer, TransForce intends to nominate Stan Dunford for election to the TransForce Board of Directors at the next annual meeting of TransForce’s shareholders, expected to be held in April 2015.