Radiant Logistics acquires Service By Air and Highways & Skyways
June 18, 2015
Bellevue, Washington based Radiant Logistics is on the acquisition trail with two takeovers this month. It has acquired Kentucky-based Highways & Skyways and it has paid £12m to buy New York-based Service By Air. Both are privately held companies that provide domestic and international transportation and logistics services across North America
Founded in 1976, Service By Air has been a pioneer in computerised operational systems and its technology lets customers manage the entire transportation logistics process from start to finish.
Founded in 1987, Highways & Skyways is located near the Cincinnati, Ohio, CVG airport and services a wide range of accounts including customers in the manufacturing, apparel, paper products, medical devices, consumer products and technology industries. From inception through the date of acquisition, it operated as an independent agency for Service By Air. On a post-closing basis, Highways & Skyways will transition to the Radiant brand and support the company’s 150+ owned and agency locations across North America and international partners around the world.
Service By Air has a diversified account base including manufacturers, distributors and retailers through a combination of company-owned operating locations in New York and California and forty independent agency locations across North America. Based on historic financial statements provided by its management, Service By Air generated about $130.7m in revenues for the twelve months ending August 2014. Service By Air will operate as a wholly owned subsidiary of Radiant.
“We believe the Highways & Skyways transaction is representative of the broader pipeline of opportunities available to us in the marketplace,” said Radiant's founder and CEO Bohn Crain. “We also believe the transaction is further validation of the strength of our value proposition in the marketplace, which is to bring new value to the agent based forwarding community by leveraging our status as a public company to provide our partners with an opportunity to share in the value they help create; providing a robust platform in terms of people, process and technology which translates into better purchasing power with our vendors and more sophisticated technology for our customers; and offering a unique opportunity in terms of succession planning and liquidity for our station owners. In this regard, we are still very early in the process and believe we will have the opportunity to welcome a number of additional like-minded entrepreneurs who can benefit from the Radiant platform.”
He said the two acquisitions meant the firm was updating its preliminary guidance for the fiscal year ending June 2016 and projecting adjusted EBITDA in the range of $30 to $35 on $900m to $960m in revenues. This is before considering the benefit of an additional $1.0m to $1.5m in cost synergies that it expects to capture as it works through the integration process.
“This is a particularly exciting time for us and we see even more opportunity on the horizon to deliver further revenue and earnings growth through a combination or organic and acquisition growth initiatives,” said Crain. “At the right place, at the right time with the right value proposition, we believe we remain uniquely positioned to deliver value for our operating partners, shareholders and the end customers we serve.”
Hank Gamm of Highways & Skyways added: “We are thrilled about joining Radiant. Through years of dedicated service, our customers have always remained our top priority whether they were here in USA or abroad. This philosophy has been key to our success. We were looking for a long-term partner with that same passion for servicing the customer and a shared vision to further advance our business and provide an opportunity for growth for our employees. We found that partner in Radiant.”
He said Radiant had a real appreciation for the needs for the local owner-entrepreneur and a clear and achievable plan for building a world-class logistics organisation.
“We are looking forward to leveraging our own strengths along with the capabilities of the Radiant network to bring additional value to our customers while enjoying the benefits of participating in an organisation that, through its status as a public company, gives our team the opportunity to work as shareholders and participate in the value that we all help create,” said Gamm, who will continue as general manager for Radiant’s CVG location.
On the Service By Air acquisition, Crain said: “We are proud to announce our acquisition of Service By Air, which has earned great brand recognition in the marketplace and brings a rich tradition of providing best-in-class service to its customers. Our plan is to continue to operate the Service By Air brand alongside Radiant’s other existing network brands while leveraging the increased and substantial purchasing power of the combined group.”
Arnie Goldstein, the chief operating officer of Service By Air, will continue in his current capacity post-closing.
“This transaction is a continuation of our long-time focus to bring value to the agent-based forwarding community and the ideal next step to accelerate Radiant’s growth, further strengthen our network footprint and leverage our combined company-owned operations in the New York and Los Angeles markets,” said Crain. “Through the purchase of Service By Air, Radiant will enjoy more than 150 operating locations across North America, giving us one of the largest footprints in our industry. We expect that this will translate into improved profitability and strategic advantage for all of our stations. We continue to gain momentum in the agent-based forwarding community with more and more logistics entrepreneurs looking to align themselves with a strong financial partner with the technology, purchasing power and global network to deliver world-class solutions to their customers. As part of our broader acquisition strategy we continue to cultivate opportunities in our core freight forwarding business and look forward to providing further updates on the acquisition front as things develop.”