Friday, October 26, 2012

US Logistics Group Purchases Freight Broker

Second Major Sale of Assets for OHL
Shipping News Feature

US – XPO Logistics, a non-asset based 3PL group has announced that it has acquired the operating assets of Turbo Logistics Inc., the freight brokerage division of Ozburn-Hessey Logistics (OHL). The cash purchase price was $50 million, excluding any working capital adjustments, with no assumption of debt. The acquisition is expected to be immediately accretive to earnings. Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said:

“Turbo Logistics is a well run, highly scalable brokerage business that has earned 28 years of respect in the industry. They have a strong carrier network and deep relationships in the retail, manufacturing and food and beverage sectors. Turbo’s expedite business has synergies with our Express-1 expedite division, and on the truckload side, we’ve now acquired a significant position in the temperature-controlled freight market.

“We’re very pleased that David Coker and Jeff Battle will be staying on in leadership positions. Their combined 33 years of experience at Turbo will help us scale up in Gainesville, the largest location, and in Reno. Our plan for Chicago is to merge it with one of our fastest-growing cold-starts, led by Abtin Hamidi. We’ll do the same in Dallas, where we have a cold-start run by Doug George that’s gaining traction. We’re effectively creating large, combined platforms that we can scale up dramatically in these two metro areas.

“We’re on track or ahead of schedule with every major component of our growth strategy: acquisitions, cold-starts and the optimization of our operations. With the acquisition of Turbo, we’re fast approaching the $500 million revenue run rate we targeted for year-end.”

Founded in 1984, Turbo Logistics serves more than 600 customers through four locations: Gainesville, Ga.; Reno, Nev.; Chicago, Ill.; and Dallas, Texas. The company had 170 employees and trailing 12 months revenue of approximately $124 million as of the 30th September 2012.

The sale of Turbo Logistics is the second transaction for OHL in 2012 with the first being the sale of Lanter Refrigeration Distribution in April earlier this year. The company says the sale of these two divisions materially strengthens OHL’s balance sheet. All proceeds from the Turbo Logistics transaction have been used to pay down long-term debt. Randall E. Curran, Chief Executive Officer of OHL, said that the company has taken steps that provide clarity and confidence for its stakeholders as well as laying out a clear strategy to grow OHL’s core service offerings.