Pacer International to Acquire Cross Con; Third Acquisition in Seven Months Expected to Improve Pacer`s Volumes, Equipment Balance, Service
The acquisition is expected to close shortly.
Pacer Chief Executive Officer Donald C. Orris, former president of Southern Pacific Transportation Company until its 1996 merger with Union Pacific Railroad (PCX/NYSE:UP), said the acquisition is designed to improve Pacer's operating efficiency and service to customers by increasing the firm's intermodal volumes and contributing to improved east-west balance of freight flows and equipment movements. Pacer and Cross Con are both non-asset-based operations, handling and managing freight and equipment for customers as a value-added service, and tendering the freight to railroads and trucking concerns for underlying transportation.
Cross Con's founder and chief executive officer, Richard P. Hyland, will become president - East for Pacer Intermodal, Pacer's intermodal brokerage unit, Orris said. The unit reports to Gary Goldfein, president of Pacer Logistics, based in Los Angeles.
Orris said the acquisition is not expected to trigger any job reductions.
Cross Con is the third intermodal transportation firm that Pacer has acquired since December, 1997, when Pacer (then known as Pacific Motor Transport) combined operations with Interstate Consolidation, Inc. and Interstate Consolidation Service, Inc. (Interstate), Los Angeles-based providers of intermodal marketing, cartage and consolidation services. More recently, Pacer acquired Stutz & Company (Stutz) of Kansas City in a merger transaction. The operations of Stutz are being consolidated into the company's DeSoto, Texas-based flatbed and specialized heavy-haul trucking division, Pacer Transport, according to its president, Gerry Angeli.
The Cross Con acquisition will make Pacer one of the largest intermodal marketing companies (brokers of intermodal transportation) and providers of related logistics services in North America, accounting for some 130,000 truckload-equivalent moves annually. The company's revenues have increased from $86.7 million in 1996 on a stand-alone basis to $252 million for the 12-month period ended March 31, 1998, on a pro forma basis after giving effect to the acquisitions of Interstate, Stutz and Cross Con. Cross Con's revenues for the 12 month period ended March 31, 1998 were $53 million.
Pacer's intermodal marketing units, which currently operate under their original names as consolidation work proceeds but will eventually be unified under the Pacer name, include ABL-Trans in Lafayette, CA; Interstate in Los Angeles; and now Cross Con.
Balanced Freight Flows
Cross Con brings to the combined company a strong westbound traffic flow that originates in the Midwest, Orris explained. Pacer, which distributes substantial volumes of freight from the West Coast to the U.S. interior and East Coast, already enjoys a strong eastbound business, so the combination is expected to help Pacer balance and control equipment more efficiently and improve service for customers.
Cross Con also brings to the company an established and historically profitable business; a solid, long-term management and employee base; an infrastructure of Chicago-area owner-operator trucking suppliers; and broader geographical representation, with offices in Chicago, New York, Atlanta and other cities, Orris added. For example, he said Cross Con offices in Detroit and Toronto support an automotive customer base and involvement in trans-border trade.
The Pacer group of companies provides a broad range of intermodal, trucking and logistics services. Its intermodal marketing unit arranges intermodal freight movements throughout North America for manufacturers and retailers, and provides customized electronic tracking, analysis of accessorial charges, and other information support. Pacer Transport, the flatbed and heavy-haul specialized trucking division, also offers its customers logistics and consolidation services. Other related services -- all available through a single provider -- include truck brokerage, less-than-truckload transport, truckload cartage, warehousing, cross-dock services, and intermodal rail car maintenance and repair. The Pacer group has some 300 employees, 120 agents, and a network of more than 775 owner-operator drivers. It is based in Lafayette, California.
FACT SHEET
Pacer International to Acquire Cross Con
PACER INTERNATIONAL CROSS CON
HEADQUARTERS Lafayette, California Chicago, Illinois
KEY DATES Pacer (then Pacific Motor Established 1977
Transport) acquired from
Union Pacific RR by Donald
C. Orris group 4/1997;
Cross Con is 3rd
subsequent acquisition.
PRINCIPAL BUS. Intermodal marketing, Intermodal marketing,
specialized trucking, truck brokerage,
logistics services, logistics services,
consolidation, truck cartage
brokerage, less-than-
truckload transport,
cartage, warehousing, rail
car M&R
EMPLOYEES 250 54
AGENTS 120 2
CONTRACT DRIVERS 775 12
TRANSP. ASSETS flatbed & heavy-haul none
trucks, leased trailers,
warehouses, cross-dock &
yard facilities
KEY MGT. Donald C. Orris, CEO, Richard P. Hyland
Pacer Intl.; Gary Goldfein, (becomes President,
Pres., Pacer Logistics; Pacer Intermodal-East)
Robert L. Cross, Pres.,
Pacer Intermodal-West;
Gerry Angeli, Pres., Pacer
Transport; Al Steiner, EVP,
Pacer Intl.; Larry C.
Yarberry, CFO
REVENUES
(12 mos. ended
3/31/98) $252 million (pro forma, $ 53 million
after giving effect to
acquisitions of Interstate,
Stutz and Cross Con)
IMC NAMES ABL-Trans, Lafayette, CA; Cross Con, Chicago
(will become Interstate Consolidation,
Pacer Intermodal) Los Angeles
SERVICE AREAS 48 states, Canada, Mexico 48 states, Canada,
Mexico
ANNUAL LOADS 130,000 50,000
RR & STACKTRAIN APL, BNSF, CP, CR, CSXI, BNSF, UP, CR, CN, CP,
CONTRACTS IC, KCS, NS, UP IC, CSX, NS, KCS,
various other
stacktrain providers
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