Alberta, Canada-based trucking and oilfield firm Mullen Group Ltd. says it will pay $172 million cash to buy Winnipeg-based transport company Gardewine Group Limited Partnership.
Mullen will purchase Gardewine North, Northern Cartage, Northern Deck, Northern Bulk and Northern Logistics. The deal is expected to close in early 2015 and requires government approvals to be finalized.
"This is one of those acquisitions that simply does not come along very often," said Murray Mullen, CEO of Mullen Group. "We do not acquire companies just for growth. They must be strategic to our business and meet our investment criteria."
Mullen expects the purchase to contribute more than $225 million (Canadian) in annual revenue and about $25 million (Canadian) in annual operating income. Mullen's trucking and logistics segment is expected to grow from 40 to 50 percent of overall company revenue with the acquisition.
Mullen added: "Trucking, and particularly the LTL segment of the transportation industry, has been and will continue to be an important element of the Canadian economy. Acquiring a brand name company like Gardewine will not only provide Mullen Group with a potential new growth opportunity, it will diversify our overall business, adding to our Trucking and Logistics segment during a time when the energy sector in western Canada is facing some cyclical headwinds. Diversification is truly one of the overall strengths of our organization."
Gardewine, founded in 1952, provides both regional less-than-truckload, truckload and specialized truckload services such as dedicated, deck and bulk hauling primarily in Manitoba and Ontario. The company has about 660 trucks and 1,300 trailers, a network of 34 terminals and employs 1,500 people and 140 owner-operators.
The Gargewine deal is the second-biggest deal in Mullen's history. The biggest deal Mullen ever made was in 2006, when they paid close to $1 billion (Canadian) worth of its trust units to buy Producers Oilfield Services Inc.
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