Celadon Group Inc. announced today, Oct. 9, that one of its wholly-owned subsidiaries has purchased the truckload business and approximately 270 tractors and 590 trailers of Erin Truckways LTD. — which does business as Digby Truck Lines Inc. — for about $21 million. Celadon also has offered employment to about 150 qualified drivers. According to the seller’s unaudited financial statements, the Nashville, Tenn.-based transportation company generated about $48 million in gross revenue in 2005.
“We are delighted with the Digby acquisition and expect it to follow the pattern established in our CX Roberson and Highway Express acquisitions during the past few years,” says Steve Russell, chairman and chief executive officer of Indianapolis-based Celadon. “In those acquisitions, as in this one, our goals are to continue to broaden our customer base with quality customers, add density in our primary traffic lanes, and gain a significant number of experienced drivers.
“Based on our evaluation of the business, we believe Digby had a core group of quality customers and drivers, but suffered from the excessive cost structure that plagues many mid-sized carriers,” Russell says. “We expect to integrate the acquired operations promptly. As part of the integration process, we expect to optimize the combined customer, driver and equipment base to improve asset productivity. We believe we can enhance the service to Digby’s former customers through an upgraded equipment fleet, excellent technology, more available assets for dispatch, and an outstanding safety record.”
Russell says that Celadon’s driver turnover has been significantly better than the industry average over the past few years, and the company plans to work hard to retain the Digby drivers. “To assist in this goal, as well as to adhere to our existing equipment strategy, we plan to retain approximately 90 of the newest tractors and approximately 180 of the newest trailers from the acquisition and dispose of the balance,” Russell says. “In the short-term, the additional Digby drivers will retain their units until seated with newer equipment. We believe this strategy will allow us to focus on enhancing our freight mix, assist with driver retention and minimize the risk of unseated tractors following the acquisition.”
