The parent to a ground transportation provider in the air cargo industry, Forward Air Corporation, has signed a definitive agreement to acquire all of the stock of Central States Trucking Company and Central States Logistics, from Central States Inc.
Founded in 1980, CST provides container and intermodal drayage services primarily within the Midwest region of the U.S., along with linehaul service within the airport-to-airport space and dedicated contract and Container Freight Station warehouse services.
CST has a seven terminal network with approximately 500 office employees and drivers. Headquartered in Bensenville, Ill., it had 2013 unaudited revenues of approximately $66 million.
The purchase price will be $95.6 million, which is approximately eight times 2013 adjusted earnings before interest, taxes, depreciation and amortization, according to Forward Air. CST will be acquired on a cash-free, debt-free basis. The transaction will be funded by Forward Air's cash reserves. The deal needs the approval of federal regulators and if received, Forward Air expects the transaction will close in the first quarter of the year.
“For a number of years we have had the desire to enter the drayage space via purchase of a company with a scalable platform,” said Bruce A. Campbell, chairman, president and CEO of Forward Air Corporation.
Bryan Grane, President and CEO of CST, said: "We feel that combined with Forward Air's strengths in expedited linehaul and final mile less-than-truckload solutions, our new partnership will allow CST to more quickly achieve our corporate vision to be the market leader in international supply-chain trucking and warehousing.”
CST has more than 90 terminals and 40 CFS stations,
Forward Air Corporation operates three business segments. Forward Air serves the air cargo business with ground services at 85 terminals in the U.S. and Canada while Forward Air Solutions is a provider of pool distribution services for the LTL sector. Total Quality provides brokerage services along with temperature-controlled equipment for temperature-controlled equipment, 24-hour monitoring and tracking technology and layered security for shipments.