Canadian transportation and logistics provider Titanium Transportation Group announced Monday it has acquired Georgia-based truckload carrier Crane Transport for $53 million in cash and debt. Titanium also acquired the carrier’s real estate for an additional $6 million.
Crane Transport operates a fleet of 200 trucks out of two 11-acre terminals in Georgia and Alabama, generating annual revenue of approximately $60 million. In addition to asset-based transportation, the company operates a small brokerage unit and a trailer rental program and has a fleet of more than 600 dry van, reefer and flatbed units.
The deal marks Titanium’s (TSX: TTNM) first acquisition in the U.S and supports its current logistics business in the U.S. Titanium’s Southeast operations now include North Carolina, Tennessee, Georgia and Alabama.
“The addition of Crane Transport’s full truckload business is highly synergistic within our existing network, immediately adding capacity and valuable new customer relationships,” said Ted Daniel, Titanium’s CEO. “The acquisition will allow us to expand our presence across the United States through our new strategically located terminals in Georgia and Alabama, expanding our service offerings and enabling us to offer a wide range of services including end-to-end supply chain and freight management solutions to our existing customers.”
The transaction was executed at roughly seven times adjusted earnings before interest, taxes, depreciation and amortization. It is expected to be accretive to earnings following full integration, which is expected to take one year.
On a call with analysts, management said Crane was operating at a 14% to 15% adjusted EBITDA margin. The goal is to bring that that in line with Titanium’s margin range of 18% to 20% over time.
“I am confident that Titanium’s strong platform and growth strategy will be a perfect fit for Crane,” said Danny Crane, Crane’s founder and CEO. “Their focus on innovation and technology, as well as culture will provide opportunities of growth for our employees, while continuing to deliver reliable service to customers, every mile of the way.”
Titanium also lowered its revenue guidance but increased margin expectations for 2023.
The company now expects revenue to be in a range of $450 million to $470 million, a 10% reduction at the midpoint of the range. Lower fuel surcharge revenue and softer volumes and pricing on transactional business were the reasons cited for the change.
The margin outlook for adjusted EBITDA increased by 100 basis points on each end of the range, which is now 10.5% to 12.5%.
The change includes a partial-year contribution from Crane.
“As the buy-side investment bankers for Titanium, Left Lane Associates couldn’t be happier for Ted Daniel and their team, making their first acquisition in the United States,” said Peter Stefanovich, Left Lane’s president.
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