Vitran Announces Agreement to Sell U.S. LTL Business
September 23 2013 - 1:00PM
Vitran Corporation Inc. ("Vitran" or the "Company") (Nasdaq:VTNC)
(TSX:VTN), 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.
About Vitran Corporation Inc.
Vitran Corporation Inc. is a North American group of
transportation companies offering less-than-truckload services
throughout the United States and Canada. To find out more about
Vitran Corporation Inc. (Nasdaq:VTNC) (TSX:VTN), visit the website
at www.vitran.com.
This press release contains forward-looking statements within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities laws.
Forward-looking statements may be generally identifiable by use of
the words "believe", "anticipate", "intend", "estimate", "expect",
"project", "may", "plans", "continue", "will", "focus", "should",
"endeavor" or the negative of these words or other variations on
these words or comparable terminology. These forward-looking
statements which include statements regarding the completion of the
transaction, the effects of the transaction on employees,
customers, and other stakeholders, risks related to the impact of
the transaction on Canadian's LTL business, risks related to
obtaining approval of the banking syndicate, risks relating to the
timing of the closing, and risks related to satisfaction of closing
conditions, are based on current expectations and are naturally
subject to uncertainty and changes in circumstances that may cause
actual results to differ materially from those expressed or implied
by such forward-looking statements.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause Vitran's actual
results, performance or achievements to differ materially from
those projected in the forward-looking statements. Factors that may
cause such differences include, but are not limited to,
technological change, increases in fuel costs, regulatory changes,
the general health of the economy, seasonal fluctuations,
unanticipated changes in railroad capacities, exposure to credit
risks, changes in labour relations and competitive
factors. More detailed information about these and other
factors is included in the annual MD&A on Form 10K under the
heading "General Risks and Uncertainties." Many of these
factors are beyond the Company's control; therefore, future events
may vary substantially from what the Company currently foresees.
You should not place undue reliance on such forward-looking
statements. Vitran Corporation Inc. does not assume the
obligation to revise or update these forward-looking statements
after the date of this document or to revise them to reflect the
occurrence of future unanticipated events, except as may be
required under applicable securities laws.
CONTACT: William Deluce, Interim President/CEO
Fayaz Suleman, VP Finance/CFO
Vitran Corporation Inc.
416/596-7664
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