ALDERSYDE, Alta. (June 14, 2005) — Western trucking and oilfield giant Mullen Transportation has bought Winnipeg-based van and flatbed carrier Payne Transportation for $1.5 million.

The deal — which also includes 100,000 Mullen common shares — gives the Alberta carrier the remaining 55 percent interest in Payne. Mullen already owned 45 percent stake in the carrier. “Our original investment in Payne has far exceeded our expectations,” said Murray Mullen, chairman and Co-CEO.

Payne specializes in general freight with van, reefer, and flatdeck divisions. It has 220 owner-operated power units and 400 trailers.

Mullen says that Payne will strengthen the company’s position in both long-haul van and flatdeck businesses. President and founder Tom Payne will continue to lead operations with current management.

Payne opened the doors of the self-named company in 2000 after 30 years with Tri-Line Expressways. He spent the last nine of those years serving as president and COO before resigning and starting his own company.

Tom Payne says that the acquisition makes a lot of sense for both companies. In an interview with TodaysTrucking.com this morning, he said being part of a larger umbrella will allow his fleet to further synergize with Mullen’s other operations as well as spread its costs.

“Any growing company today, you have to look at consolidation, and a continuation of critical mass to compete,” he says. “They say we’re deregulated now, but we have more regulation controls on us today then we’ve ever had… and that costs.”

Mullen President and Co-CEO Stephen Lockwood said the addition of Payne as a wholly-owned subsidiary capitalizes on the opportunities in trucking and is consistent with the carriers’ current growth strategy.

“The acquisition of Payne comes at a time when we are seeing a strong demand for trucking services, particularly in western Canada,” he said. “In the current economic climate we are optimistic that Payne will be able to sustain or even increase its annual revenues from its 2004 level of approximately
$40.0 million and that operating margins approaching 10 percent can be achieved.”

“Payne also strengthens to a certain extent our deck business and van business, and also gives us a presence in Manitoba which we currently don’t have,” Lockwood said in a subsequent interview with TodayTrucking.com.

As long as Tom Payne keeps doing what he’s done to date, the company will continue to grow, says Lockwood. “When we do acquisitions, especially when they’re further a field than Alberta, we need some comfort that the people running the business will stick around and continue running it successfully,” he said. “We’re very pleased Tom has agreed to do that.”

Payne Transportation plans to open a new 40, 000 sq.-ft facility this fall in Winnipeg. The new $4 million head office will have a 12 bay tractor-trailer shop area; parts shop; wash bay; cross docking facility; after hours driver facility; and its own weigh scale.