Universal Truckload Services will acquire Westport Axle from a Brazil-based industrial group, gaining new inroads into truck manufacturing and access to more industrial freight.
Universal, No. 26 on JOC’s ranking of the Top 50 Trucking Companies, plans to acquire Westport, a warehousing and distribution trucking company owned by SM Brasil Participações, for $123.0 million, subject to a post-closing adjustment. To finance the acquisition, Universal anticipates increasing its senior credit facility to $300.0 million. The North American asset-light transportation and logistics services provider said it expects to receive regulatory approval for the transaction and close on it by the end of December, subject to customary closing conditions.
Based in Louisville, Ky., Westport provides warehousing and component distribution services to U.S. manufacturers of Classes 4-8 trucks, recreational vehicles and super duty trucks, and also manufactures and distributes steering knuckles and axle components for the automotive industry. The company’s revenue was $58.4 million for the full year of 2012, and $66.0 million in the first nine months of 2013. These results, which imply a 50 percent increase year-over-year, were driven by contract wins over the past few years, as well as development in existing locations, according to Stifel Transportation & Logistics Research Group.
“The acquisition of Westport strategically enhances our customer base by further penetrating industrial markets, specifically to manufacturers of medium and heavy-duty trucks,” said Scott Wolfe, CEO of Universal Truckload Services, in a written statement. “We believe that Westport’s value-added services and limited capital requirements fit nicely into Universal’s business model and long-term growth strategy.”
Universal’s acquisition of LINC Logistics last year helped the company branch out into the auto industry, as well as the agricultural and off-road equipment space. This new purchase of Westport now “brings another leg to its customer base and broadens the end markets that the company serves,” Stifel said.
Universal’s profit in the third quarter of 2013, which included results from LINC Logistics, was $13.7 million, down 8.7 percent year-over-year, although quarterly revenue rose 1.9 percent to $261.7 million.