Anatomy of an acquisition
BELLEVILLE, Ont. on Monday,louis vuitton, Jan. 31 when Rob Haggarty and Craig Cottrell gathered to address the office staff at CSI Logistics at its headquarters in Cornwall, Ont. At the same time,tory burch sandals, Max Haggarty was summoning International Truckload Services (ITS) employees for an announcement at the company's Belleville facilities, 256 kilometres to the west along Hwy. 401.
What was about to transpire was the culmination of months of boardroom bargaining and legal wrangling that occurs behind the scenes of any significant trucking industry acquisition.
Sometimes,oakley, the cat is already out of the bag long before the paperwork is signed and the merger or acquisition is announced. Other times, as was the case of ITS's acquisition of CSI Logistics, the deal is completely unforeseen.
How it started
Rob Haggarty is the president and COO of family owned ITS, which he operates along with his father Max and sister Pam. The carrier was founded in 1987 and specializes in the trans border delivery of commodities such as paper, aluminum,coach factory outlet, steel and automotive parts. The fleet operates 240 tractors today along with a fleet of 750 trailers, serving markets in Ontario, Quebec and into the US, with an average length of haul of less than 1,000 miles.
The company learned a valuable lesson from the recession of the past few years: that it was too reliant on certain segments of the industry and on cross border freight. "In dealing with the US, it's always challenging. You have border issues, CSA (a new US truck enforcement regime) is coming,marc jacobs handbags, you have the ups and downs of the currency exchange, the economy in the US and the cost of insurance. So, we decided over the last couple years that we wanted to reduce our dependence on the US market. Not to decrease the business we're doing there,ugg boots clearance, but just to increase our domestic business."
At the same time, the North American manufacturing sector was being hammered and ITS came to the realization it was too reliant on this uncertain sector of the economy.
"ITS was more industrial, historically," Haggarty said. "Those commodities we hauled (paper, aluminum,north face jackets clearance, corrugated steel and automotive parts, to name a few) were hit the hardest in the recession and with the US going through difficulties and the Canadian dollar rising, that was putting challenges on exporters of all those products."
Noticing a serious decline in its revenue about two and a half years ago, Haggarty said it began growing its retail business.
"That is what carried us through the recession," Haggarty said. "We see with retail,coach handbags, less fluctuations. You get spikes during Christmas or special holidays, but you know they're coming, you can plan for them."
As the economy began showing signs of life last year, ITS began considering acquisitions as a way to further diversify its fleet. The company was quietly shopping for possibilities when Haggarty ran into his old friend Cottrell,free running, who owned CSI Logistics, a 62 truck fleet out of Cornwall that served many of the same markets as ITS but with a heavy focus on retail. Cottrell hired Haggarty at his first trucking job some 25 years ago and the two had stayed in touch ever since.
"We'd see each other at conventions and shows and say hello," Haggarty recalled. "In the fall,ray ban, he stopped in to say hello. I asked him if he had any interest in selling and he said 'no,mulberry uk, maybe in a few years'. He phoned me three days later and said 'we'll talk now'."
Whatever caused the sudden change of heart, the wheels for an acquisition were now in motion. ITS and CSI Logistics were both new to the acquisitions game.
"We had never purchased a company and of course,louis vuitton purses, he had never sold his company, so we were both rookies in dealing with how to move forward," Haggarty said. "But because we knew each other, there was a bit of comfort there. It gave us a trust and that trust helped us get through those unknowns."
Taking the next step
Having realized CSI Logistics would complement ITS's existing business nicely,lulu lemon, the two principals began some preliminary number crunching. Each company brought a lawyer and an accountant to the table to establish the net worth of CSI's assets.
Other business units belonging to Cottrell, including a trailer leasing business and a maintenance shop would not be included in the deal. of sales for a period of time to maintain his accounts and ensure a smooth transition.
Talks were kept quiet to keep rumours from surfacing, which wasn't easy, especially for a family business.
"We were able to keep it very quiet,supra," Haggarty said. "There were only two or three people here who knew."
Despite a long running friendship and a mutual respect, Haggarty admitted there were times during the negotiations when tensions arose and the deal began to look like it may not get done.
"There were a couple moments that were a little tense," he admitted. "I think it got more so between the lawyers."
With that in mind, Haggarty and Cottrell decided to ditch the lawyers and try to get a deal done without them. On a quiet Sunday,usa soccer jersey, Cottrell and his wife Linda met with Haggarty and his father Max at ITS headquarters. A deal was signed that afternoon, sans lawyers.
"At the end of the day, we decided to keep the lawyers out of it," Haggarty said. "We knew best. Lawyers are lawyers, they're going to go back and forth."
With a deal in place, the next significant challenge was to inform the staffs of both companies about the deal.
Announcing the deal
Rob Haggarty and Cottrell decided they would make the announcement to CSI Logistics staff together on Monday, Jan. 31 while ITS patriarch Max Haggarty would inform its staff at precisely the same time.
Haggarty and Cottrell drove to Cornwall on Jan. 30 and spent the night. The next morning, they made the potentially unsettling announcement to CSI Logistics staff.

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