GUELPH, Ont. — One half of this summer’s biggest acquisition deal has filed for creditor protection. St. Thomas, Ont.-based L.E. Walker Transport, who was purchased by Guelph, Ont.-based MacKinnon Transport in August, filed a notice of intention (NOI) and entered into a creditor protection environment Dec. 8.
“The company has been operating under the NOI since that time and currently continues to do so with Deloitte as the trustee,” Evan MacKinnon, president and CEO of MacKinnon Transport, told trucknews.com via e-mail this morning. “We are continuing negotiations with the CIBC (L.E. Walker’s bankers) and other secured creditors while reviewing the best options available to restructure the company. This action does not include any aspects of MacKinnon Transport Inc and is limited completely to L.E. Walker Transport Limited.”
The acquisition deal, announced at the end of August, created a combined entity operating out of MacKinnon’s head office in Guelph, boasting 1,300 pieces of equipment and a workforce of 420 people. At the time, the Walker Group consisted of L.E. Walker Transport and Mid America Freight Systems, both major players in the dry van and flatbed marketplaces in North America.
The summer’s MacKinnon-Walker deal received high praise from industry analysts, with some calling it the “right move” and hinting at further TL consolidation in the future.
Well-known industry consultant Dan Goodwill, a former trucking company executive himself, praised the deal saying, “If MacKinnon and Walker can retain the revenue, right size the business, drive some synergies, and the financials of the deal are solid, this would be a good move.”
The deal was considered unique in that the two companies were able to combine diversified resources with very little duplication of accounts – 5% or less.
MacKinnon was quoted in the summer as saying that the greatest benefit to customers stemming from the transaction would be the ability to grow in a financially sound manner.
“There are more and more customers concerned these days if a company has a financial problem: where is their freight going to be when that happens? As far as a customer looking to develop a relationship for the long-term, this is going to make us very financially strong,” MacKinnon said. “When the opportunity for growth comes, now that we’ve combined the two companies and with the level of profitability we’re going to achieve, it means we will not be eating up equity to sustain the business, which is what most trucking companies are doing these days.”
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