Roadrunner Sells Off 700-Truck Intermodal Division to Universal Logistics
Downers Grove, IL – Roadrunner Transportation Systems announced in a press release sent to Transportation Nation Network (TNN) on Tuesday the sale of Roadrunner Intermodal Services (RIS) to Michigan-based Universal Logistics Holdings for $51.25 million cash.
RIS provides drayage and chassis management services to transport freight between ocean ports, rail ramps and shipping docks nationwide.
Representatives from Universal said RIS operates a fleet of over 700 tractors, both company-owned and owner-operator provided.
Roadrunner’s CEO, Curt Stoelting, called the sale “another step forward” in the company’s strategy to simplify its portfolio.
Also included in the sale under the umbrella of RIS are Morgan Southern, Inc. out of Conley, GA; Wando Trucking, LLC out of Mt. Pleasant, SC; and Central Cal Transportation, LLC. out of Fresno, CA.
Roadrunner acquired Morgan Southern in February 2011 for just over $20 million cash, followed by Central Cal in November 2012 for a reported $4 million, and Wando in April 2013 for approximately $9 million.
“Universal Logistics is an established transportation and logistics company that shares our dedication to customer service and is a good fit for the intermodal services business,” Stoelting commented.
“The acquisition of RIS is extremely exciting for us,” said Jeff Rogers, Universal’s CEO, calling RIS a “strong competitor” of Universal over the years.
Following the acquisition, Universal expects its intermodal drayage business to operate an estimated fleet of over 2,500 tractors and have 49 terminal locations throughout the U.S.
Universal also predicted future annual revenues in excess of $500 million.
According to the RIS website, which was still active as of this publishing, the company has 23 locations across the U.S. near major seaports and inland rail ramps.
RIS reported revenues of approximately $125 million for the trailing 12 months ending on September 30, 2019 and was part of Roadrunner’s truckload segment, the company said.
In September, TNN reported Roadrunner’s plan to downside its “unprofitable” dry van business.
Roadrunner faced a significant scandal earlier this year when Peter Armbruster, the company’s former CFO, was arrested in April in what authorities allege was a complex $245 million stock scam.
Armbruster and two co-conspirators, also executives with Roadrunner, were indicted on 19 counts of conspiracy, securities fraud, wire fraud, bank fraud and attempting to influence auditors to falsify the company’s books in order to artificially inflate the firm’s earnings between 2013 and 2017.
The news of the alleged scam and subsequent indictments drove Roadrunner’s stock price down significantly, costing shareholders approximately $245 million.