Mullen Group Announces Acquisition to Expand its Trucking/Logistics Network - Seite 2

Mullen Group expects the Transaction will contribute additional annual revenue in excess of $225.0 million and will be immediately accretive to Mullen Group shareholders. Currently Gardewine generates margins that are lower than Mullen Group's existing Trucking/Logistics segment, however management believes that once synergies are realized, accompanied by focused capital allocation initiatives, margins will improve and compare more favourably with existing business units in the segment.

Strategic Rationale:

• Gardewine is a stable, profitable well managed business;
  
  
• the acquisition will expand the geographic coverage of Mullen Group's network of regional LTL business into Manitoba and Ontario. With this acquisition, Mullen Group will own and operate five regional LTL businesses in Canada allowing it to provide enhanced services to all customers;
  
  
• the acquisition is expected to be accretive, adding approximately $25.0 million in annual operating income, with the potential to increase as synergies are realized;
  
  
• the Transaction includes 23 owned terminals valued at approximately $40.0 million;
  
  
• the acquisition is expected to diversify Mullen Group's current revenue stream. Based on current forecasts and budgets, Mullen Group's Trucking/Logistics segment is expected to grow from 40% of overall revenue to approximately 50% in 2015;
  
  
• the acquisition will be accretive on various financial metrics, providing support to Mullen Group's dividend during a time when the oil and natural gas industry in western Canada is expected to experience a cyclical downturn due to low commodity pricing; and
  
  
• the acquisition represents an effective use of excess cash on Mullen Group's balance sheet.
  
  

Gardewine Key Metrics:

Area of Operation: Gardewine delivers to over 500 communities in Manitoba and northern Ontario along with Saskatchewan and Alberta.

Services Provided: Gardewine's primary service offering is LTL General Freight hauling. In addition, Gardewine provides a wide range of specialized trucking services including Dedicated, Deck and Bulk hauling.

Operating Assets: 660 power units of which 520 are company owned and 140 are owner operator units. 1,300 trailers which include straight vans, reefer units, decks and specialized bulk hauling trailers.