Roadrunner Transportation System set to acquire Active Aero Group

The acquisition wagon keeps on rolling for Cudahy, Wisc.-based Roadrunner Transportation Systems Inc. (RRTS), a non asset-based third-party logistics services provider. 

RRTS said yesterday it has entered into a definitive merger agreement to acquire Belleville, Mich.-based Active Aero Group, a provider of ground and air expedited services through its proprietary TMS, for roughly $115 million, with the acquisition expected to close by the end of September.

Active Aero, said RRTS, employs spot bid technology and controlled capacity for its ground and air expedited services, adding that its procurement system and multi-modal offering provides shippers with “the most advantageous and cost efficient means of meeting their time-critical logistics needs.”

Active Aero serves shippers in various industries, including life sciences, automotive and consumer goods manufacturers, defense contractors, utilities, and retail. Its service menu is comprised of ground expedited, air freight, on-board courier, air charter, unscheduled truckload, and blended solutions.

For the last 12 months ended June 30, 2014, Active Aero generated total revenues of approximately $265 million and is expected to be accretive to earnings in the fourth quarter of this year.

RRTS Mark DiBlasi said in a statement that bringing Active Aero into the fold meets a goal the company has had its eye on for a while.

“As we have indicated, the ability to provide air and ground expedited services to meet customers’ total transportation needs has been a key strategic objective for Roadrunner,” he said. “Active Aero’s strong position in the marketplace is based upon the high quality of its service offering and personnel and its unique blend of expedited services. As a result, we believe Active Aero represents an ideal match with our strategy and an excellent platform for growth in expedited services globally.”

This is the fourth acquisition RRTS has made in 2014, following July’s acquisition of Kokomo, Indiana-based regional logistics provider ISI, and February’s acquisition of Little Rock, Arkansas-based Rich Logistics, a provider of truckload and expedited services. And in March it all of the outstanding stock of Unitrans International Corporation, a leading high-quality, non-asset based provider of international logistics solutions based in Los Angeles.

RRTS has been and expects to continue to be active when it comes to making acquisitions. Since January 2006, it has made nearly acquisitions and company officials have told LM it looks for companies that are well-run and well-managed profitable businesses and non-asset or light-asset in their business model.

“Even though we acquire some companies with assets at times, we do look for companies that provide capacity that are actual carriers and are going to give us additional reach…or compliment existing resources as we build out our portfolio of services and are immediately accretive,” an RRTS executive told LM in a previous interview. “Integration is also key as we look for a very strong cultural fit between the management team we are acquiring and our management team. If that fit is not there, we will walk away from a deal; we have done that before.”

Stifel Nicolaus analyst Dave Ross wrote in a research note that Active Aero’s biggest concentration is in the automotive sector, but RRTS hopes to diversify the revenue base and has already identified positive cross-selling opportunities with some of its industrial manufacturing customers.

Ross also observed that NLM, one of Active Aero’s primary competitors, was acquired by XPO Logistics late last year, which serves as an ongoing indication that expedited transportation management is becoming key for growing full-service logistics platforms.

What’s more, compared to other deals RRTS has made, Ross said Active Aero brings with it a fair amount of assets, in the form of its USA Jet Airlines aircraft fleet, which includes several short-range narrow-body jets, and access to 100 U.S.-based aircraft and 70 Mexico-based aircraft for use and lease as needed. And it also has 50 company trucks, coupled with access to 750 carriers with more than 9,000 trucks in addition to Roadrunner’s fleet of more than 4,000 trucks, as well as access to 140 carriers and 9,500 trucks in Mexico, according to Ross.