Release Date: 18 October 2006
Release ID: 1095
Celadon Group Inc. (Nasdaq:CLDN) announced that on Friday, Oct. 6, 2006, one of its wholly-owned subsidiaries purchased the truckload business and approximately 270 tractors and 590 trailers of Erin Truckways LTD., d/b/a Digby Truck Lines Inc. (“Digby”) for approximately $21 million. In addition, Celadon offered employment to approximately 150 qualified drivers. According to the seller’s unaudited financial statements, the Nashville, Tennessee-based transportation company generated approximately $48 million in gross revenue in 2005.
Steve Russell, Chairman and Chief Executive Officer, stated, “We are delighted with the Digby acquisition and expect it to follow the pattern established in our CX Roberson and Highway Express acquisitions during the past few years. In those acquisitions, as in this one, our goals are to continue to broaden our customer base with quality customers, add density in our primary traffic lanes, and gain a significant number of experienced drivers.
"Based on our evaluation of the business, we believe Digby had a core group of quality customers and drivers, but suffered from the excessive cost structure that plagues many mid-sized carriers. We expect to integrate the acquired operations promptly. As part of the integration process, we expect to optimize the combined customer, driver, and equipment base to improve asset productivity. We believe we can enhance the service to Digby’s former customers through an upgraded equipment fleet, excellent technology, more available assets for dispatch, and an outstanding safety record.
"At Celadon, our driver turnover has been significantly better than the industry average over the past few years, and we plan to work hard to retain the Digby drivers. To assist in this goal, as well as to adhere to our existing equipment strategy, we plan to retain approximately 90 of the newest tractors and approximately 180 of the newest trailers from the acquisition and dispose of the balance. In the short-term, the additional Digby drivers will retain their units until seated with newer equipment. We believe this strategy will allow us to focus on enhancing our freight mix, assist with driver retention and minimize the risk of unseated tractors following the acquisition. We expect the acquired operations to be accretive beginning in the December 2006 quarter."
Celadon will hold a conference call to discuss its fiscal first quarter financial and operating results and the impact of the acquisition on Friday, Oct. 20, 2006, at 10:00 a.m. ET. Participants may join the conference by dialing 800-510-0178 pin # 22842534 a few minutes prior to the starting time. A replay will be available through Dec. 20, 2006 by dialing 888-286-8010 and entering call back code 24185881.
Founded in 1985, Celadon Group Inc. (www.celadongroup.com) is a truckload carrier headquartered in Indianapolis that operates in the U.S., Canada and Mexico. Celadon also owns TruckersB2B Inc. (www.truckersb2b.com) which provides cost savings to about 20,000 member fleets.
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