WOODSTOCK, Ont. — It’s business as usual for Contrans Income Fund as it announced the acquisition of Tripar Transportation, a specialized transportation business focused on the movement of truckload, partial truckload and less-than-truckload shipments. Contrans’ acquisition comes the week after Finance Minister Jim Flaherty announced income trusts would be subject to the same income tax policy as other corporations by 2011.
Tripar, headquartered in Oakville, Ont., services customers with overnight service primarily between southern Ontario and the north eastern US. Tripar currently operates 18 highway tractors, employs 25 owner/operators under contract, and utilizes 85 van trailers in its business. Tripar recorded revenue of approximately $24 million in its most recent fiscal year ended January 31, 2006. Contrans officials say they intend to maintain Tripar’s employees, customers and business model.
“We have always strived to provide industry-leading levels of service to our customers and build businesses around niche customers and markets,” said Stan Dunford, CEO of Contrans. “Tripar has developed a unique transportation service that will expand and complement the offerings of Contrans which are already highly diversified.”
In conjunction with the acquisition of Tripar, Contrans Income Fund entered into a private placement arrangement with Integrated Private Debt Corp. for up to $50 million in senior secured notes over a 10-year term. The agreement provides for monthly payments of interest only.
“We are also very pleased to expand our long-term credit facilities,” Dunford added. “We believe that the transportation industry will continue to consolidate and this loan facility positions us well to be able to act quickly on strategic opportunities when they arise.”
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