Struggling less-than-truckload giant YRC Worldwide said it will sell part of its YRC Logistics operation for $37 million to private equity investor Austin Ventures and partner with that firm on some overseas trade services.
The carrier said “YRC Worldwide will retain all of its China-based operations,” while the portion it is selling will become a private firm owned by Austin, and the two companies share a “strategic partnership.”
The partners said they will both realize incremental value “through a comprehensive commercial services agreement,” and the transition should be completed in 30 to 45 days.
The news came as YRC’s stock has been trading below 18 cents a share, but it pushed above 20 cents after the announcement. YRC earlier this month said it was going through its available cash, http://www.joc.com/trucking/cash-burn-singes-yrc and revised an agreement with creditors to borrow more.
The new Austin unit will specialize in international freight forwarding, customs brokerage, transportation management, truckload services, and dedicated warehouse and fulfillment services in North America, Latin America, Europe and Asia.
William D. Zollars, YRC chairman, president and CEO, said the deal allows his LTL company “to focus on our core transportation capabilities, while continuing to offer full global logistics solutions for our customers through a strong business relationship with the new company.
“There will be no change in the way a customer’s business is handled, and they will benefit from advancements in the delivery of comprehensive supply chain solutions by both companies. In addition, the incremental liquidity from the transaction will support YRC Worldwide business growth,” Zollars said.
The current management team of YRC Logistics “remains in place, and customers will experience the same expertise and accountability,” said John Carr, president of that unit. What’s more, Carr said “the substantial equity infusion from Austin Ventures positions us to pursue new business development as well as growth through acquisition.”
Austin Ventures already has investments in port-based warehousing and distribution, truck and intermodal brokerage. In the deal with YRC Logistics, Austin partner David Lack said his group sees “opportunities to invest in the company and position it for growth through expanded offerings and the continued expansion of its global network.”
-- Contact John D. Boyd at email@example.com.