Forward Air acquires Total Quality for $66M
Forward Air Corp. of Greeneville, Tenn., has acquired Total Quality Inc., a Grand Haven-based provider of maximum security and temperature-controlled transportation and logistics services to the pharmaceutical and life science industries throughout the United States.
TQI had 2012 revenues of approximately of $54.8 million. The purchase price was $66 million (or approximately eight times TQI’s 2012 adjusted EBITDA) plus an earn-out of up to $5 million based upon TQI’s performance in 2013 and 2014. TQI was acquired on a cash-free, debt-free basis with an adjustment for working capital. The transaction will be funded by Forward Air’s cash reserves and is expected to be accretive to its 2013 earnings.
Founded in 1992 by Terry Fewless, TQI uses temperature-controlled shipping equipment, 24-hour real-time monitoring and tracking technology, and layered security features and practices. In addition to its core pharmaceutical services, TQI also provides truckload and less-than-truckload brokerage transportation services.
“We feel that TQI and Forward Air are a great fit,” said Fewless, who is president of TQI. He added that “this is a necessary and logical next step for TQI. Forward Air will be able to provide us with the perfect mix of resources, structure and industry expertise necessary to capture our growth potential, while not sacrificing our customer commitment to provide high quality service.”
Bruce A. Campbell, chairman/CEO of Forward Air, said the company “has looked at a number of acquisition opportunities over the last few years only to have them eliminated from consideration due to core customer channel conflicts, high levels of asset intensity or inferior margins and returns. None of those hurdles exists with TQI.”
Forward Air Corp. (Nasdaq: FWRD) operates two business segments: Forward Air Inc. and Forward Air Solutions Inc.
“We look forward to the addition of this newest service offering to our airport-to-airport network, TLX full truckload, complete pick-up and delivery and solutions final mile services,” added Campbell. “Undoubtedly, there will be both cross-selling and operational opportunities for our combined teams to take advantage of as we move forward.”
Forward Air Inc. is a contractor to the air cargo industry providing time-definite ground transportation services through a network of terminals on or near major airports in 85 cities in the United States and Canada. The service is an alternative to air transport of cargo that is relatively less time-sensitive than traditional air freight, or when air transportation is not economical.
Forward Air Solutions Inc. provides pool distribution services, which involves the consolidation and shipment of several less-than-truckload shipments to a common area or region. At the regional destination, the loads are regrouped with other shipments with common delivery points, and delivered. The pool distribution network consists of terminals and service locations in 19 cities within the Mid-Atlantic, Southeast, Midwest and Southwest regions of the country.