Roadrunner Transportation Systems recently agreed to sell its Prime Distribution Services business to CH Robinson Worldwide for $225 million in cash.
The final sale price is subject to customary purchase adjustments, and the transaction also is subject to customary closing conditions, including regulatory approval, Roadrunner said. The companies expect to close the deal by the end of March.
“Prime Distribution Services is a high-quality growth company that brings scale and value-added warehouse capabilities to our retail consolidation platform, adding to our global suite of services,” said Bob Biesterfeld, CH Robinson’s chief executive officer. “Prime has an outstanding track record of success, a talented and experienced team and a focus on delivering great value to its customers and carriers.”
Prime Distribution, headquartered in Plainfield IN, provides a suite of retail consolidation solutions, with five food grade warehouse facilities located across the nation and a team of retail supply chain experts dedicated to helping clients achieve compliance with large US retailer delivery and in-stock requirements. The business had revenue of $108.7 million in 2019, Roadrunner said, and was part of its Ascent Global Logistics segment.
“The divestiture of Prime Distribution Services is a unique opportunity for us to significantly improve our balance sheet by paying off all borrowings under our ABL and Term Loan Credit Facilities,” said Curt Stoelting, chief executive officer of Roadrunner. “We believe we are well-positioned to execute our strategy of simplifying our portfolio by investing in our remaining Ascent Global Logistics, Active On-Demand and asset light LTL segments. We also believe that our stronger balance sheet will enable us to pursue additional value-creation opportunities, such as incremental organic business expansion and tuck-in acquisitions. We remain committed to improving operating performance, generating attractive returns on invested capital and building long-term shareholder value.
“We have great respect for CH Robinson, its management team and employees. We know the CH Robinson team shares our commitment to customers and is dedicated to providing quality logistics services that help customers operate and grow their business.”
Founded in 1990, Prime employs approximately 270 people and serves about 140 customers. Its fulfillment and distribution facilities total approximately 2.6 million square feet. CH Robinson plans to integrate Prime into its North American surface transportation division and Navisphere, its single global, multimodal technology platform, after the deal closes.
“Prime Distribution brings capabilities and synergies to our North American surface transportation business and allows us to provide a strategic advantage for our customers delivering to retailers,” said Mac Pinkerton, president of North American surface transportation at CH Robinson. “We are excited to welcome the talented team at Prime to CH Robinson, and we will work hard to create even more value for our combined set of employees, customers and carriers.”
