Universal Truckload Services completed its acquisition of LINC Logistics, a Warren, Mich.-based third-party logistics provider heavily associated with the automotive industry and especially automakers Ford, General Motors and Chrysler.
Both companies have ties to transportation magnate Manuel J. “Matty” Moroun, president and CEO of CenTra, who also controls the Detroit-Windsor Ambassador Bridge linking Michigan and Ontario and Central Transport, a less-than-truckload carrier with nearly 200 customer service centers.
Universal and LINC Logistics, both profitable, had nearly $1 billion in revenue in 2011, increasing their sales 15.5 and 18.5 percent from 2010, respectively. Universal reported $699.8 million in revenue, and LINC Logistics $290.9 million.
LINC had a $35.6 million net profit, while Universal earned $15.8 million.
Universal is an asset-light company and the 27th-largest North American truckload carrier by revenue, according to data from SJ Consulting Group. It contracts with about 3,000 owner-operators and owns several trucking subsidiaries.
The acquisition, first announced in late July, was completed Oct. 1 with a $150 million advance from Universal’s lenders, according to a U.S. Securities and Exchange Commission filing. Universal also entered a new $220 million credit agreement with its lenders.
The $150 million advance settled debts owed by LINC to the Manuel Moroun and his son Matthew T. Moroun and other third-party debtors, according to the SEC filing. The Morouns owned LINC Logistics and hold about 82 percent of Universal’s stock.
The Universal-LINC deal is the latest in a string of acquisitions and mergers in the logistics and transportation arena by companies such as Arkansas Best, C.H. Robinson Worldwide, UPS, FedEx, Celadon Group and Roadrunner Transportation.
In most of those cases, the acquisitions brought buyers new services or markets, diversifying their portfolios. In others, they helped buyers expand existing operations by bringing in new drivers, building lane density and adding customers.
The LINC acquisition diversifies and strengthens Universal’s trucking business, giving the carrier a logistics arm with nearly $300 million in revenue. About 84 percent of Universal’s revenue is from dry van and flatbed trucking.
LINC’s business has been growing with the U.S. automotive industry, which provided 79.2 percent of its revenue in 2011. The company is working to diversify its customer base, launching two Wal-Mart consolidation centers in 2011.
“The addition of LINC significantly enhances our long-term growth profile, increases our percentage of contractually-based revenues, and further diversifies our business mix,” said Don Cochran, president and CEO of Universal, also based in Warren.
The deal also ended a $158 million initial public offering LINC launched in May 2011, another sign of an increasingly difficult IPO market as investors eye the elections, the slow recovery and the “fiscal cliff” drawing near in January.