Acquisitions | 9 Months Ended |
Sep. 30, 2014 |
Business Combinations [Abstract] | ' |
Acquisitions | ' |
2. Acquisitions |
On April 30, 2013, the Company acquired all of the outstanding capital stock and the Charleston, South Carolina property of Wando Trucking, Inc. ("Wando Trucking") for the purpose of expanding its current market presence in the TL segment. Cash consideration paid was $9.0 million. The acquisition was financed with borrowings under the Company's credit facility discussed in Note 5. |
On April 30, 2013, the Company also acquired all of the outstanding stock of Adrian Carriers, Inc. and C.B.A. Container Sales, Ltd. (collectively, "Adrian Carriers") for the purpose of expanding its current market presence in the TMS segment. Cash consideration paid was $14.2 million. The acquisition was financed with borrowings under the Company's credit facility discussed in Note 5. The Adrian Carriers purchase agreement calls for contingent consideration in the form of an earnout capped at $6.5 million. The former owners of Adrian Carriers are entitled to receive a payment equal to the amount by which Adrian Carriers' operating income before amortization, as defined in the purchase agreement, exceeds $2.3 million for the years ending April 30, 2014, 2015, 2016, and 2017. Approximately $4.3 million was included in the TMS purchase price allocation related to this earnout on the opening balance sheet. |
On July 25, 2013, the Company acquired all of the outstanding membership interests of Marisol International, LLC ("Marisol") for the purpose of expanding its current market presence in the TMS segment. Cash consideration paid was $66.0 million. The acquisition was financed with borrowings under the Company's credit facility discussed in Note 5. The Marisol purchase agreement calls for contingent consideration in the form of an earnout capped at $2.5 million. The former owners of Marisol are entitled to receive a payment equal to the amount by which Marisol's operating income before depreciation and amortization, as defined in the purchase agreement, exceeds $7.8 million for the years ending July 31, 2014 and 2015. No amount was included in the TMS purchase price allocation related to this earnout on the opening balance sheet. |
On August 15, 2013, the Company acquired certain assets of the Southeast drayage division of Transportation Corporation of America, Inc. ("TA Drayage") for the purpose of expanding its current market presence in the TL segment. Cash consideration paid was $1.2 million. The acquisition was financed with cash on-hand. |
On September 11, 2013, the Company acquired all of the outstanding membership interests of G.W. Palmer Logistics, LLC ("G.W. Palmer") for the purpose of expanding its current market presence in the TL segment. Cash consideration paid was $2.5 million. The acquisition was financed with borrowings under the Company's credit facility discussed in Note 5. The G.W. Palmer purchase agreement calls for contingent consideration in the form of an earnout capped at $2.8 million. The former owners of G.W. Palmer are entitled to receive an initial payment, not to exceed $0.7 million, for achieving operating income before amortization, as defined in the purchase agreement, in excess of $0.9 million for the period from the closing date through December 31, 2013, and a payment equal to the amount by which G.W. Palmer's operating income before amortization exceeds $1.0 million for the years ending December 31, 2014, 2015, 2016, and 2017. No amount was included in the TL purchase price allocation related to this earnout on the opening balance sheet. |
On September 18, 2013, the Company acquired substantially all of the assets of YES Trans, Inc. ("YES Trans") for the purpose of expanding its current market presence in the TL segment. Cash consideration paid was $1.2 million. The acquisition was financed with cash on-hand. The YES Trans purchase agreement calls for contingent consideration in the form of an earnout capped at $1.1 million. YES Trans is entitled to receive a payment equal to the amount by which YES Trans' operating income, as defined in the purchase agreement, exceeds $0.2 million for the years ending December 31, 2014, 2015, 2016, and 2017. No amount was included in the TL purchase price allocation related to this earnout on the opening balance sheet. |
On February 24, 2014, the Company acquired all of the outstanding stock of Rich Logistics and Everett Transportation Inc. and certain assets of Keith Everett (collectively, "Rich Logistics") for the purpose of expanding its current market presence in the TL segment. Cash consideration paid was $47.3 million. The acquisition was financed with borrowings under the Company's credit facility discussed in Note 5. |
On March 14, 2014, the Company acquired all of the outstanding stock of Unitrans, Inc. ("Unitrans") for the purpose of expanding its current market presence in the TMS segment. Cash consideration paid was $53.5 million. The acquisition was financed with borrowings under the Company's credit facility discussed in Note 5. |
On July 18, 2014, the Company acquired all of the outstanding stock of ISI Acquisition Corp. (which wholly owns Integrated Services, Inc. and ISI Logistics Inc.) and ISI Logistics South, Inc. (collectively, "ISI") for the purpose of expanding its current market presence in the TL segment. Cash consideration paid was $13.0 million. The acquisition was financed with borrowings under the Company's credit facility discussed in Note 5. |
On August 27, 2014, the Company acquired all of the outstanding stock of Active Aero Group Holdings, Inc. ("Active Aero") for the purpose of expanding its presence within the TL segment. Cash consideration paid was $118.3 million. The acquisition was financed with borrowings under the Company's credit facility discussed in Note 5. |
The acquisitions of Wando Trucking, Adrian Carriers, Marisol, TA Drayage, G.W Palmer, and YES Trans (collectively, "2013 acquisitions") are considered individually immaterial, but material in the aggregate. The acquisitions of Rich Logistics, Unitrans, ISI, and Active Aero (collectively, "2014 acquisitions") are considered individually immaterial, but material in the aggregate. The following table summarizes the allocation of the purchase price paid to the fair value of the net assets for the 2013 and 2014 acquisitions in the aggregate (in thousands): |
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| | 2014 Acquisitions | | 2013 Acquisitions | | | | | | | |
Accounts receivable | | $ | 67,262 | | | $ | 22,666 | | | | | | | | |
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Other current assets | | 6,610 | | | 922 | | | | | | | | |
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Property and equipment | | 31,151 | | | 14,392 | | | | | | | | |
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Goodwill | | 149,592 | | | 78,646 | | | | | | | | |
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Customer relationship intangible assets | | 39,000 | | | 19,727 | | | | | | | | |
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Other noncurrent assets | | 242 | | | 12 | | | | | | | | |
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Accounts payable and other liabilities | | (61,831 | ) | | (35,706 | ) | | | | | | | |
Total | | $ | 232,026 | | | $ | 100,659 | | | | | | | | |
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The goodwill for the acquisitions, in the aggregate, is a result of acquiring and retaining the existing workforces and expected synergies from integrating the operations into the Company. Goodwill of $2.0 million associated with the asset purchases will be deductible for tax purposes while the remaining goodwill will not be deductible for tax purposes. Purchase accounting is considered final for the 2013 acquisitions. Purchase accounting is considered preliminary for the 2014 acquisitions as final information was not available as of September 30, 2014. |
From the dates of acquisition through September 30, 2013, the 2013 acquisitions contributed revenues of $33.5 million for the three months ended September 30, 2013 and $41.2 million for the nine months ended September 30, 2013, and contributed net income of $1.5 million for the three months ended September 30, 2013 and $2.3 million for the nine months ended September 30, 2013 before the incremental acquisition transaction expenses associated with each acquisition. The following supplemental unaudited pro forma financial information of the Company for the three and nine months ended September 30, 2013 includes the results of operations for the 2013 acquisitions, in the aggregate, as if the acquisitions had been completed on January 1, 2012 (in thousands): |
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| Three Months Ended | | Nine Months Ended | | | | | | | | |
| September 30, | | September 30, | | | | | | | | |
| 2013 | | 2013 | | | | | | | | |
Revenues | $ | 377,327 | | | $ | 1,099,439 | | | | | | | | | |
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Net income | $ | 13,199 | | | $ | 37,923 | | | | | | | | | |
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From the dates of acquisition through September 30, 2014, the 2014 acquisitions contributed revenues of $98.6 million for the three months ended September 30, 2014 and $180.6 million for the nine months ended September 30, 2014, and contributed net income of $5.3 million for the three months ended September 30, 2014 and $10.9 million for the nine months ended September 30, 2014 before the incremental acquisition transaction expenses associated with each acquisition. The following supplemental unaudited pro forma financial information of the Company for the three and nine months ended September 30, 2014 and 2013 includes the results of operations for the 2014 acquisitions, in the aggregate, as if the acquisitions had been completed on January 1, 2013 (in thousands). |
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| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2014 | | 2013 | | 2014 | | 2013 |
Revenues | $ | 529,169 | | | $ | 469,972 | | | $ | 1,546,672 | | | $ | 1,288,597 | |
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Net income | $ | 14,698 | | | $ | 15,509 | | | $ | 44,452 | | | $ | 41,269 | |
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The supplemental unaudited pro forma financial information above is presented for informational purposes only. It is not necessarily indicative of what the Company's financial position or results of operations actually would have been had the Company completed the acquisitions at the dates indicated, nor is it intended to project the future financial position or operating results of the combined company. |