Canada’s largest trucking firm, TransForce, has offered to buy fellow top Canadian carrier Contrans for about CA$495 million in cash.
TransForce bid CA$14.60 in cash per share for Woodstock-based trucking company, Contrans.
"I have admired the progress of Contrans for some time,” said Alain Bédard, 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,” Bédard said. “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 addition to the TansForce money, Contrans would pay a special dividend. which comes from the recent sale of Contrans’ Waste Transportation segment. In total, shareholders could receive CA$15 per share.
Contrans ranks number 10 on Today’s Trucking’s Top 100 Carriers list, with about 1,400 power units and 2,600 trailers under management. TransForce ranks first.
Contrans CEO Stan Dunford commented: "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. I believe the entrepreneurial culture of Contrans will fit in well with TransForce.”
The offer is not subject to any financing condition.
TransForce has entered into a commitment letter with National Bank of Canada and Royal Bank of Canada to ensure that the required funds will be available to make full payment to complete the Contrans acquisition.
The offer is expected to close August 21.
If the deal goes through, TransForce intends to nominate 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.