Two Canadian trucking operations, Mullen Group and Kriska Holdings, have signed a letter of intent to create Kriska Transportation Group Limited, a freight transportation and logistics company based in Ontario that is already being described as a "powerhouse."
Mullen Group will be contributing its ownership in the carrier Mill Creek Motor Freight in exchange for a 30% stake in Kriska Transportation.
Mark Seymour, president and CEO of Kriska Holdings, will be contributing his interest in Kriska Holdings to Kriska Transportation in exchange for a 70% share of the new company, where he will also be president and CEO.
In addition to Mullen Group having a board position in Kriska Transportation, the new company will be acquiring property used in the operations of Kriska Transportation and will be entering into long-term leases with Kriska Transportation.
Both Mill Creek and Kriska Holdings will continue to operate as wholly owned subsidiaries of Kriska Transportation. Kriska Transportation will be one of the largest growt- orientated Ontario-based transportation and logistics companies.
The deal is expected to close in the final quarter of this year.
"Over the past 12 to 18 months there has been significant consolidation in the trucking and logistics sector, particularly in eastern Canada,” said Murray K. Mullen, chairman, CEO and president of Mullen Group. “As such we believe our timing is right to partner with Mark Seymour and his team in the creation of a new growth orientated company that provides alternatives to customers, employees, owner operators and a new platform for additional investments into well run trucking and logistics companies.
He believes aligning with Kriska Transportation provides Mullen Group shareholders with the best opportunity to participate in the industry consolidation that the company expects to occur in the Ontario trucking sector.
“The best way to describe the deal is to call it a strategic partnership, but what makes it unique? Isn't it just another example of the consolidation we've seen happening more and more in recent years? No, it's not,” wrote Rolf Lockwood, vice president of editorial at Newcom Business Media, which publishes the Canada-based Today’s Trucking magazine, and who is executive contributing editor for Truckinginfo.com and Heavy Duty Trucking magazine.
You can read more of Rolf’s analysis about this deal on the Today’s Trucking website.