Saia today, Nov. 20, announced that it has acquired The Connection Co. (“The Connection”), a less-than-truckload carrier headquartered in Columbus, Ohio, that provides coverage to the Midwest markets in Indiana, Kentucky, Michigan and Ohio. Saia says The Connection, founded in 1983, has 20 terminals and 700 employees; its operations will be integrated into Saia in early 2007, adding the major markets of Cincinnati, Cleveland, Columbus, Detroit, Indianapolis, Louisville, Ky., and Toledo, Ohio.
“This acquisition advances Saia toward our strategic goal of achieving complete coverage across North America,” says Rick O’Dell, president of Duluth, Ga.-based LTL carrier Saia. “By extending our quality service into attractive, adjacent geography, there are also distinct advantages for our customers.” The expanded Saia organization will serve 34 states with 149 terminals.
The purchase price consideration of about $17.5 million is four times EBITDA, according to Saia, and The Connection is a $70 million company with an operating ratio in the high 90s. Excluding one-time costs, Saia expects the acquisition to break even in 2007 due to a step-up in employee wages and benefits, as well as investments in capital, and be accretive in 2008; the related one-time costs are about $3.5 million.
“We welcome The Connection employees and customers to Saia”, says O’Dell. “The Connection has been our partner since February 2006, so many of our customers are familiar with their coverage and service quality.”
Consistent with successful past integration strategy, Saia management plans to quickly integrate The Connection with the goal of accelerating enhanced customer service, operating efficiencies and synergy revenue development. The integration is expected to be completed in February 2007, with synergy lanes between the regions opened in March.
