Saia recently announced that it has acquired fellow LTL carrier Madison Freight Systems, headquartered in Waunakee, Wis. MFS provides 100 percent direct coverage to the state of Wisconsin and limited coverage in Illinois and Minnesota. Founded in 1943, MFS has five terminals and 200 employees; its operations will be integrated into Saia’s direct service in Wisconsin.
“This acquisition advances Saia toward our strategic goal of increased density in our existing geography and providing full-state coverage,” says Richard O’Dell, president and chief executive officer of Duluth, Ga.-based Saia. “By enhancing direct coverage and the quality of service in our footprint, there are distinct advantages for our customers.” The expanded Saia organization will serve 34 states with 151 terminals.
Saia says the purchase price consideration of about $2.5 million is 3.0 times EBITDA, and MFS has about $15 million in annualized revenues and is operating at break-even level. Saia expects the acquisition to be $0.02 accretive in 2007, including the estimated integration costs of $900,000.
“We welcome MFS employees and customers to Saia,” O’Dell says. “We will begin exchanging freight immediately. This acquisition will leverage Saia’s existing operations in the area, including the recent addition of our second terminal in Chicago.”
Consistent with successful past integration strategy, Saia management plans to quickly integrate MFS with the goal of accelerating enhanced customer service, operating efficiencies and synergy revenue development. The integration is expected to be completed in March 2007. Supplemental information about the Saia expansion, including a map of the new coverage area, is available at www.saia.com.
Saia also recently reported 2006 results with revenue of $875 million from continuing operations, an increase of 16 percent from 2005. Operating income for 2006 from continuing operations was $50.0 million, including $4.1 million in restructuring and integration expenses, compared with 2005 operating income of $50.4 million, which included a $7.0 million pretax real estate gain. Income from continuing operations increased to $25.9 million in 2006 from $25.2 million in 2005.
“For the fifth consecutive year, Saia produced growth and improvement in our core operating results,” O’Dell says. “Our customers responded to Saia’s strong service offerings, which resulted in 16 percent revenue growth for the year. In 2006, Saia again built upon our track record of growth and margin improvement. Saia further advanced our positioning for long-term profitable growth and shareholder value creation, particularly with our fourth-quarter acquisition of The Connection.”