Vitran Corporation Inc. a North American transportation firm, announced today that it has entered into an agreement to sell its U.S. LTL business to a company owned by industry
veteran Matthew Moroun. Mr. Moroun is associated with a number of transportation companies whose interests include LTL, TL, Flatbed, Third Party Logistics and Warehousing.
“We are pleased to have reached an agreement to sell our U.S. LTL business,” said William S. Deluce, Vitran’s Interim President and Chief Executive Officer. “For the last several years, Vitran has invested substantial time and capital to improve its U.S operating results. While we believe these efforts have made Vitran’s U.S. LTL business a better operating company, they did not result in financial results that are acceptable to management or the Board.
“With the assistance of our financial advisors, we have evaluated a wide range of strategic alternatives over the last five months,” Mr. Deluce continued. “We are pleased to have agreed upon a plan that we believe gives Vitran’s U.S. LTL employees and customers the best chance to prosper while also preserving value for all of Vitran’s stakeholders.”
Under the terms of the proposed sale transaction, an entity controlled by Mr. Moroun will pay $2 million to acquire 100% of the common stock of the wholly-owned U.S. subsidiary which operates Vitran’s US LTL business, thereby assuming the U.S. business’s ongoing liabilities.
Additionally, the buyer will fund the U.S. operating business between today and the date of closing. The transaction is scheduled to close within 10 business days and is subject to certain conditions including obtaining the consent of Vitran’s bank syndicate. There is no assurance that the proposed transaction will be completed within this timeframe, if at all.
“We are also excited about the positive impact this transaction will have on Vitran’s Canadian LTL business,” Mr. Deluce said. “Over the last 25 years, Tony Trichilo and his team have built one of Canada’s premier providers of LTL services. This model has resulted in consistent profitability and cash flow generation. With this transaction, we are now excited to be solely focused on the Canadian business, which currently has cash of approximately $22 million.” Stephens Inc. is acting as Vitran’s financial advisor in connection with the proposed sale transaction.