Con-way, Inc. announced that it has entered into an agreement to acquire Contract Freighters, Inc. (CFI), a privately held North American truckload carrier based in Joplin, Mo., in a transaction valued at $750 million.
Founded in 1951, CFI is a respected, industry-leading service provider that today operates over 2,600 tractors and more than 7,000 trailers, with more than 3,000 employees including approximately 2,500 drivers that serve customers throughout North America.
The acquisition elevates Con-way into a unique position in the freight transportation industry, creating a leading less-than-truckload (LTL), truckload (TL) and supply chain management enterprise with a broad portfolio of high-value solutions, noted Douglas W. Stotlar, Con-way’s president and CEO.
“Acquiring CFI is a significant addition to Con-way’s ability to serve the customer. It establishes a superior platform for growth, clearly differentiating Con-way as a premier provider of supply chain and freight transportation solutions,’ said Stotlar. “This acquisition is a cornerstone of our strategic plan to grow the company, build competitive advantage and increase shareholder value.’
The acquisition will join CFI with Con-way’s existing Con-way Truckload division, creating a business unit with over $500 million in annual revenues for truckload freight. Together with the complementary capabilities of LTL carrier Con-way Freight, and global supply chain services provider Menlo Logistics, the Con-way organization will deliver an expanded transportation and logistics platform to North America-based shippers as well as global businesses, from “first-mile’ sourcing in Asia or Europe, to “last-mile’ delivery in North America.
“We are excited to join the Con-way family of operating companies. CFI will benefit from Con-way’s infrastructure, broad service capabilities and strong brand recognition,’ said Herb Schmidt, president and CEO of CFI. “Becoming part of the Con-way organization will allow us to penetrate new markets and provide new services to our customers. In addition, Con-way and CFI share service philosophies and common values such as safety, integrity, commitment, and excellence.’
The companies expect to realize a number of strategic benefits from the combination, including:
Diversified revenue mix. The combined truckload operations will generate approximately $500 million in truckload revenue for the Con-way enterprise, enabling the company to reach a more diversified mix between LTL, TL and logistics revenues, helping to moderate the effects of cyclical swings in the business units.
Improved truckload operations. Con-way’s existing truckload operations will be integrated into CFI’s headquarters in Joplin, Mo. Moving this under CFI’s best-in-class operating and management practices will markedly improve profitability on Con-way Truckload’s existing revenue generated through dedicated line-haul services for its sister LTL company Con-way Freight.
Retained contract carrier margins. CFI is Con-way Freight’s largest provider of contract services for long-haul transcontinental truckload transportation. The acquisition will enable Con-way to retain margins from this contract business. In addition, Con-way Freight is CFI’s largest customer, and the company foresees opportunities to further optimize freight operations for both the LTL and truckload networks through this acquisition.
Enhanced Mexico presence. With operations in Mexico for nearly 20 years, CFI is recognized as one of that country’s leading transportation providers, and is among the largest participants in the market for cross-border truckload freight. Combining CFI’s network, experience and expertise with Con-way Freight’s Mexico network and Menlo’s in-country and border-based logistics operations significantly improves the combined company’s presence and capabilities in Mexico.
Expanded presence in key industries. CFI’s strong customer base in the retail and consumer products industries complements Con-way Freight’s strength in the industrial and