Radiant Logistics Acquires Adcom Worldwide
Radiant Logistics, Inc., a domestic and international logistics services company, recently announced it has acquired Adcom Express, Inc. d/b/a Adcom Worldwide, a Minneapolis, Minnesota-based, privately held company that provides a full range of domestic and international transportation and logistics services across North America. The transaction is valued at up to $11.1M , consisting of cash of $5.0M to be paid at closing with an additional $6.1M payable over the next four years in a combination of cash and Company common stock based on the future performance of the acquired operation. The cash provided at closing is subject to certain hold- back provisions and a working capital adjustment as of the closing date.
Founded in 1978, Adcom services a diversified account base including manufacturers, distributors and retailers through a combination of three company owned and twenty seven agency offices across North America. Based on historic financial statements provided from management, Adcom generated approximately $58.0M in revenues for the twelve months ended June 30, 2008. Adcom will operate as a wholly owned subsidiary of Radiant Logistics.
In connection with the acquisition of Adcom, the Company also announced that it has increased its revolving credit facility with Bank of America, N.A. from $10.0M to $15.0M to provide Radiant with access to additional capital in support of future acquisitions, working capital and general corporate purposes.
"We are proud to announce our partnership with Bob Friedman and the Adcom team," remarked Radiant's Chairman and CEO, Bohn Crain. "We believe this transaction is the ideal next step to accelerate our growth and further strengthen our networks. We often talk about our business in terms of people, process and technology and the scalability of our business model. I don't think we could have found a better match. We are constantly looking for ways to bring value to our network participants and believe this transaction delivers. Our plan is to continue to operate under both the Adcom and Airgroup brands while leveraging the substantial purchasing power of the combined group. We expect this will translate into improved profitability and strategic advantage for all of our stations. Our organizations also share very similar cultures and operate using the same technology platform. We believe all of these elements combine to provide for a winning combination and pave the way for a smooth integration."
Crain Continued: "The financial metrics of the combined group are also compelling. On a pro forma basis, we expect the combined group to generate approximately $4.0M in adjusted EBITDA on $160M in annual revenues, effectively doubling our profitability. This is before considering the additional $1.0M in estimated cost synergies which we believe can be achieved over the next 12-18 months as we work through the integration process. In support of the Adcom transaction, we have also increased our credit facility with Bank of America from $10.0M to $15.0M and post closing we will have approximately $7.0M in remaining availability to support future acquisitions and our on-going working capital requirements. This is a particularly exciting time for us. Even in what most would agree is a tough business climate, we continue to enjoy access to the capital markets to support our growth and are executing a strategy that will continue to deliver substantial revenue and earnings growth.. We believe this sets us apart in today's marketplace and we look forward to delivering - delivering for our customers, our stations and our shareholders."
The Company's estimate of future revenues and profits is based on the assumption that the cumulative historical financial results of operations of the Company and Adcom for the most recent 12 months ended June 30, 2008 are indicative of the future financial performance of the combined group. A reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP measure, appears at the end of this release.
Bob Friedman, of Adcom commented, "We are thrilled about joining Radiant. Through years of dedicated service, without fail, our customers have always remained our top priority whether they were here in U.S. or abroad. This philosophy has been key to our success. We were looking for a long term partner with that same passion for servicing the customer and a shared vision to further advance our business. We found that partner in Radiant. Radiant has a real appreciation for the needs for the local owner/entrepreneur and a clear and achievable plan for building a world class logistics organization. The value Radiant is bringing to the marketplace is unique and represented a compelling opportunity for the Adcom network. We are looking forward to leveraging our own strengths along with the capabilities of the Radiant network to bring additional value to our customers while enjoying the benefits of participating in an organization that, through its status as a public company, gives our employees and station owners the opportunity to work as shareholders and participate in the value that they help create." Mr. Friedman will continue as the President and Chief Operating Officer of Adcom.
Supplemental Pro Forma Information We believe that supplemental disclosure of our adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization adjusted for stock-based compensation and other non-cash costs is a useful measure for investors because it eliminates the effect of certain non-cash costs and provides an important metric for our business
About Adcom Worldwide
Adcom Worldwide is a wholly-owned subsidiary of Radiant Logistics, Inc. Adcom Worldwide, founded in 1978, provides worldwide transportation and distribution services through its extensive network of exclusive agent and company owned offices across North America. To learn more about how to join the Adcom network.About Radiant Logistics
Radiant Logistics is executing a strategy to build a global transportation and supply chain management company through organic growth and the strategic acquisition of regional best-of-breed non-asset based transportation and logistics providers, to offer its customers domestic and international freight forwarding and an expanding array of value added supply chain management services, including asset recovery/reverse logistics, order fulfillment, inventory management and warehousing..
SOURCE: Radiant Logistics, Inc.