FFE Sells Non-Freight Business
Frozen Food Express Industries, Dallas, has sold the trailer and refrigeration unit related assets of one of its subsidiaries, W&B Refrigeration Service Company
Frozen Food Express Industries, Dallas, has sold the trailer and refrigeration unit related assets of one of its subsidiaries, W&B Refrigeration Service Company.
The assets were purchased by W&B Newco, L.P. of Dallas, a newly formed limited partnership, which is controlled by John Chisolm, the current president and general manager of W&B Refrigeration Service Company.
The transaction is not expected to have a significant impact on FFE's 2001 operating results. The sales price approximated $15 million -- $6.8 million in cash, a $4.1 million subordinated note, a minority partnership interest in W&B Newco, L.P. and the buyer's assumption of approximately $3 million of liabilities related to the business. The cash proceeds from the sale will be used to reduce FFE's long-term debt, which was about $15 million on September 30, 2001.
Stoney M. (Mit) Stubbs, Jr., chairman and CEO of FFEX, said that the sale is part of an ongoing program to realign the company's operations in light of what he described as changes in the market for refrigerated trucking services.
"For some time now we have been working to focus our operations more closely with changing demands of our marketplace. To accomplish this, we must direct our attention and our capital more closely to our core business, where we believe we can earn the greatest return on invested capital. The sale of W&B is an important part of that effort," he said.
FFE will continue to operate the remainder of its non-freight business. Those activities include the operations of AirPro, which is involved in the sales and service of various climate control and refrigeration products. With the closing of the transaction, FFEX will change the name of W&B Refrigeration Service Company to AirPro Holdings, Inc. and W&B Newco, L.P. will change its name to W&B Service Company, L.P.
FFE also noted that the sale of these operations will enable it to reduce the anticipated need for borrowed funds.
Frozen Food Express Industries is the largest publicly owned temperature-controlled carrier of perishable goods in North America.
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