Manitoulin Group's announcement tonight that it will be purchasing all shares in major LTL player Vitran may be its biggest move of the year, but it's certainly not the first.
Manitoulin, which has over 3,000 pieces of equipment and more than 60 terminals across Canada, has been on an aggressive acquisition streak this year with a goal to expand its western reach and press forward with plans to have complete transportation coverage throughout the country.
Just a few weeks ago it announced its acquisition of Smooth Freight out of Brandon, Manitoba. Smooth Freight provides LTL and truckload services and storage trailer rentals to more than 300 communities in southern and western Manitoba, from terminals in Winnipeg and Brandon. It owns more than 200 trailers and 25 trucks.
In April Manitoulin acquired Matco Transportation Systems of Edmonton, which was providing domestic and international freight, household goods relocations services and warehousing with a geographic focus in Edmonton, Calgary as well as the Northwest Territories and Yukon. Matco has seven terminal locations in Edmonton, Calgary, Inuvik, Norman Wells, Yellowknife, Hay River and Whitehorse.
A month prior to the Matco announcement, Manitoulin had acquired Cratex Industries, an Edmonton-based crating, packaging and export services company. Headquartered in Edmonton, with a facility in Calgary, Cratex had been providing professional packaging for the shipment of manufactured goods since 1989.
Purchases made in 2012 included Expedite Plus, a specialized service provider for the movement of highly time critical shipments across the globe via air and ground; Can-Tran Intl, an international freight forwarding enterprise operating out of Leduc, Alta.; and Beler International, a Regina based freight forwarder.
In 2011 Manitoulin purchased the LTL business of Penner International and Exalta Corp. of Alberta.
Vitran's shares are being acquired by 2398946 Ontario Inc., an affiliate of Manitoulin Transport Inc. The total transaction, including the assumption of Vitran's outstanding net debt of approximately US$29 million at October 31, 2013, is valued at approximately US$128 million. The US$6.00 share price represents a 10.3% premium to Vitran's closing price on NASDAQ on December 9, 2013, and a 38.2% premium to the closing price on NASDAQ on September 20, 2013, the day before the announcement of the sale of Vitran's US LTL business.
Vitran's Interim President and Chief Executive Officer, William Deluce stated in a release, "We are extremely excited to join with Manitoulin Transport to leverage the operational strengths of both companies. Together Vitran and Manitoulin Transport will become a formidable and diversified supplier for customers requiring a full suite of transportation and supply chain services in Canada and the United States. We are extremely pleased that this transaction will provide our shareholders significant and immediate value for their shares. We thank each and every one of our Vitran employees for their efforts and steadfast commitment to Vitran and wish them nothing but the best in the future."
The Arrangement has been unanimously approved by the board of directors of Vitran and is subject to approval by the shareholders of Vitran at a special meeting expected to be held in February 2014.
