UTi Worldwide acquires Market Industries for $197.1 million

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Global logistics provider UTi Worldwide Inc. has announced that it has acquired Market Industries Ltd. — a privately held provider of third-party logistics services and multimodal transportation capacity solutions specializing in truck brokerage — for $197.1 million in cash.

Market Industries, based in Portland, Ore., provides a variety of domestic freight management services, branded under the trade name Market Transport Services, to clients across the United States and Canada. For its fiscal year ended Dec. 31, Market Industries generated unaudited gross revenues of about $358.9 million, according to UTi, which expects the acquisition of Market Industries to be modestly accretive to its earnings in the first year.

“This acquisition is a further testament to UTi’s commitment to deliver value in its long-term strategic journey,” says Roger I. MacFarlane, chief executive officer of Rancho Dominguez, Calif.-based UTi. “We believe that freight management is an important and necessary element in providing our clients a truly global integrated logistics solution, which is the goal of our NextLeap strategy. Today’s acquisition, which complements our September 2005 acquisition of Concentrek, brings UTi one step closer to that goal.”

According to UTi, Market Industries — with an employee count of about 600, along with independent contractor associates and about 175 independent affiliates and agent offices — facilitates the movement of more than 300,000 truckloads each year and provides services to more than 5,000 customers across various vertical markets. The 36-year-old company also contracts with more than 35,000 motor carriers and has access through common carrier agreements to more than 1 million power units.

“On behalf of our executive management team and employees, we are proud to become an integral part of UTi’s growing global logistics platform,” says P. Brian Fitzgerald, chairman and CEO of Market Industries. “UTi, with its vast array of best-in-class supply chain solutions, is a great strategic partner for us, and we are excited to begin offering an expanded portfolio of capabilities to our client base. With our existing expertise in transportation management and truck brokerage, we believe we will be a valuable contributor to the continued growth and success of the UTi organization.” Fitzgerald is expected to continue in his current role with the company, along with President Charles F. Hornecker, Division Presidents Gary M. Wilson and Donald R. Farthing, and Chief Financial Officer Matthew J. Tachouet.

“Under the leadership of a seasoned management team with more than 113 years of cumulative service in the transportation industry, Market Industries has an impressive track record of organic growth and a history of successfully integrating strategic acquisitions,” MacFarlane says. “We are very pleased that, like UTi, Market Industries’ corporate culture focuses on establishing deep relationships with clients in order to become the primary or single-source provider of supply chain solutions. We look forward to welcoming the entire Market Industries team to our UTi family. We are confident that Market Industries will further strengthen our competitive advantage and increase the opportunities for UTi to provide even greater value to both potential and current clients.”

UTi says the acquisition was funded by a combination of current cash reserves and the proceeds from a new $150 million senior secured six-month term credit facility. To repay the credit facility, UTi is proposing to raise up to $200 million pursuant to an anticipated private placement of senior notes. UTi also is proceeding with a new $250 million worldwide revolving credit facility.