Forward Air Corporation Acquires Total Quality, Inc.
GREENEVILLE, TENN.--(BUSINESS WIRE)--
Forward Air Corporation (NASDAQ:FWRD) today announced that it has acquired Total Quality, Inc. (TQI), a premium provider of maximum security and temperature-controlled services to the pharmaceutical and life science industries.
Headquartered in Grand Haven, MI, TQI had 2012 revenues of approximately of $54.8 million. The purchase price was $66 million (or approximately 8x TQI’s 2012 adjusted EBITDA) plus an earn-out of up to $5 million based upon TQI’s performance in 2013 and 2014. TQI was acquired on a cash free, debt free basis with an adjustment for working capital. The transaction will be funded by Forward Air’s cash reserves and is expected to be accretive to its 2013 earnings.
Founded in 1992, TQI utilizes industry-leading temperature–controlled equipment, 24-hour real-time monitoring and tracking technology, and layered security features and practices to provide its customers with a level of service that is unmatched in the industry today. In addition to its core pharmaceutical services, TQI also provides truckload and less-than-truckload brokerage transportation services.
Terry Fewless, founder and President of TQI, said: “We are extremely excited to join the Forward Air team. We feel that TQI and Forward Air are a great fit, as each company truly values providing best-in-class service levels to its customers. This is a necessary and logical next step for TQI. Forward Air will be able to provide us with the perfect mix of resources, structure and industry expertise necessary to capture our growth potential, while not sacrificing our customer commitment to provide high quality service.”
Bruce A. Campbell, Chairman, President and CEO, said, “We are very excited about the acquisition of TQI. Our team has looked at a number of acquisition opportunities over the last few years only to have them eliminated from consideration due to core customer channel conflicts, high levels of asset intensity or inferior margins and returns. None of those hurdles exists with TQI.”
Continuing, Mr. Campbell said, “Not unlike our legacy airport-to-airport business, TQI has found a niche where they provide extremely high levels of service to their customer base that recognize this value driven proposition. This high level of service is a differentiator as well as a barrier to entry for other would be competitors.
In closing, Mr. Campbell said, “We look forward to the addition of this newest service offering to our airport-to-airport network, TLX full truckload, Complete pick-up and delivery and Solutions final mile services. Undoubtedly, there will be both cross-selling and operational opportunities for our combined teams to take advantage of as we move forward.”
About Forward Air Corporation
Forward Air Corporation operates two business segments, Forward Air, Inc. and Forward Air Solutions, Inc.
Forward Air, Inc. is a high-service-level contractor to the air cargo industry providing time-definite ground transportation services through a network of terminals located on or near major airports in 85 cities in the United States and Canada. It provides these services as a cost-effective alternative to air transportation of cargo that must be delivered at a specific time but is relatively less time-sensitive than traditional air freight or when air transportation is not economical.
Forward Air Solutions, Inc. is a provider of pool distribution services. Pool distribution involves the consolidation and shipment of several smaller less-than-truckload shipments to a common area or region. Once at the regional destination, the loads are deconsolidated, then grouped with other shipments with common delivery points, and delivered in a very precise, time-sensitive manner. Our pool distribution network consists of terminals and service locations in 19 cities within the Mid-Atlantic, Southeast, Midwest and Southwest.
This press release contains “forward-looking statements,” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements other than historical information or statements of current condition and relate to future events or our future financial performance, including, without limitation, statements as to TQI or the anticipated benefits of the transaction. Some forward-looking statements may be identified by use of such terms as “believes,” “anticipates,” “intends,” “plans,” “estimates,” “projects” or “expects.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements: economic factors such as recessions, inflation, higher interest rates and downturns in customer business cycles, our inability to maintain our historical growth rate because of a decreased volume of freight moving through our network or decreased average revenue per pound of freight moving through our network, increasing competition and pricing pressure, surplus inventories, loss of a major customer, the creditworthiness of our customers and their ability to pay for services rendered, our ability to secure terminal facilities in desirable locations at reasonable rates, the inability of our information systems to handle an increased volume of freight moving through our network, changes in fuel prices, claims for property damage, personal injuries or workers' compensation, employment matters including rising health care costs, enforcement of and changes in governmental regulations, environmental and tax matters, the handling of hazardous materials, the availability and compensation of qualified independent owner-operators and freight handlers needed to serve our transportation needs and our inability to successfully integrate acquisitions. As a result of the foregoing, no assurance can be given as to future financial condition, cash flows or results of operations. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Copyright Business Wire 2013