North Bay’s ProNorth Transportation has been acquired by the Titanium Transportation Group of Woodbridge in a cash and share deal worth $5.8 million.
Titanium announced Nov. 25 that it has received the approval of its board of directors to finalize definitive agreements to acquire ProNorth. The transaction is expected to close on Dec. 1.
Ted Daniel, CEO of Titanium told BayToday, said no layoffs at ProNorth are in the cards.
“It will create opportunity for ProNorth to expand,” he said. “We're a public company with a lot of money in the bank to invest in our future growth and get our shareholders a good rate of return over the next five to 10 years.”
ProNorth, a truckload and less-than-truckload road carrier, maintains terminals and facilities in Sudbury, Timmins and Mississauga.
It was founded by Brian Glass in 1986 and has an Ontario-wide base of more than 250 customers, 110 power units, 280 trailers and 150 employees and independent owner-operators.
The acquisition of ProNorth increases Titanium's fleet size by 30 per cent to more than 450 power units and over 1,200 trailers.
Titanium was ranked by PROFIT magazine as one of Canada's Fastest Growing Companies for seven consecutive years.
"We're hoping to increase the amount of freight by using our ability to expand our network, not shrink it,” said Daniel. "We're a young company and we're looking to take good existing established companies that are looking into the next generation of companies.”
Under the terms of the agreement, Titanium acquires all of the stock of ProNorth for total cash consideration of $5.8 million and 1,750,000 common shares. Upon closing, ProNorth is expected to have approximately $1.7 million of cash on hand. The remaining $4.1 million of the cash consideration will be funded using Titanium's existing credit facilities.
Titanium also will be purchasing real estate used in the operation of ProNorth for the aggregate purchase price of $2.5 million. The purchase of the real estate will be funded using $250,000 of cash on hand and a $2.25 million nine-year, interest-free, vendor-take back financing agreement.
