Less-than-truckload giant YRC Worldwide is getting out of the truckload business, selling most of the assets of unprofitable truckload subsidiary Glen Moore to Celadon Trucking, a fast-growing truckload carrier with an aggressive appetite.
Specific terms of the transaction were not disclosed Thursday. YRC Worldwide and Celadon are both publicly owned companies. The sale is the latest step by YRC Worldwide to prune away business units not directly related to its LTL trucking core.
“Less-than-truckload shipping is what we do best,” said James Welch, CEO of the $4.3 billion holding company.
The transaction helps YRC Worldwide “precisely focus” its efforts on LTL by simplifying its portfolio and streamlines operations “while still offering truckload services to interested customers through our provider relationships,” he said.
Glen Moore is a $109.6 million carrier with about 600 trucks and more than 1,900 trailers. YRC acquired the carrier, established in 1986, in 2005 as part of its acquisition of USF and its regional LTL trucking companies.
But the truckload carrier hasn’t fared well in the LTL family. Glen Moore had an operating loss of $10.6 million in 2010 and suffered cumulative losses of $36.8 million since 2007, while operating revenue dropped 9 percent since 2008.
Celadon, in contrast, is a highly profitable $556.7 million carrier that has been expanding by acquisition. The Indianapolis-based company recently added $100 million to its credit line and bought the dry van assets of Frozen Foods Express.
In October, Celadon purchased a 6.3 percent stake in USA Truck, but the rival truckload carrier, while losing money, rebuffed potential talks about a merger or acquisition. That set Celadon on the road to Carlisle, Pa., and Glen Moore.
“This is an exciting opportunity for Celadon,” said Paul Will, vice chairman, president and COO for Celadon Group. Glen Moore’s services will “augment our existing expertise, adding to our scale and accelerating our growth.”