MONTREAL, Que. — TransForce will be looking to the US truckload segment when it resumes its buying spree sometime next year.
This year has been quiet on the M&A front, and TransForce invested its money into buying back its own shares rather than growing through acquisition. But Alain Bedard, president, CEO and chairman of TransForce said on an earnings call with analysts this morning that he’d like to grow the company’s US truckload segment in 2016.
“Our focus is going to be probably on growing our US TL base,” he said. “If you look at valuations of TL companies in the US, valuations have come down big-time so I think the focus of M&A is going to be in the US for us in 2016.”
Another priority for TransForce will be to do something with its waste management business. Bedard said there will be news on this front by early 2016, but wouldn’t reveal whether it will be sold or whether TransForce will be a buyer or partner with an existing waste management entity.
Any US truckload acquisitions are likely to be sizeable and will probably come from the East Coast to complement Transport America, which has a strong presence in the Midwest, Bedard said.
TransForce announced this week it has discontinued its money-losing US rig moving business and will sell or redeploy those assets, focusing on segments of its business that generate higher returns.
Bedard said he doesn’t expect the economic landscape to change but he’s hopeful the low Canadian dollar will spur some manufacturing and export increases in Central Canada.
“Going forward, we don’t anticipate a significant change in the North American economic landscape,” Bedard told investors. However, he said higher consumer confidence and spending in the US should benefit TransForce’s parcel and courier and truckload activities south of the border.
Contrans, acquired by TransForce last year, has seen a decrease in volumes.
“Contrans has always been a great company, the only problem is we are missing some volume,” Bedard said. “Their activity is not what we hoped it would be…Contrans is a well-oiled machine but it’s not pumping out the profit it should, because of a lack of volume.”
The LTL environment, Bedard said, is under intense pricing pressure, with too many providers losing money.
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