Pacer Int`l Expands Intermodal Business Through Merger With Manufacturers Consolidation Service
Pacer International, Inc. (Pacer), a California-based multimodal transportation and logistics services organization serving global, national and regional manufacturers and retailers, said it has expanded its intermodal and truck brokerage operations through a merger with Memphis-based Manufacturers Consolidation Service (MCS), an intermodal marketing company with a complementary business, including a strong presence in the Southeast.
Pacer Chief Executive Officer Donald C. Orris said the merger is designed to improve Pacer's operating efficiency and service to customers by increasing the firm's volumes and by contributing to improved east-west balance of freight flows and equipment movements. He also noted that MCS offers a 26-city national sales and operating network and the drayage (local trucking) capabilities of its Levcon subsidiary.
Pacer and MCS 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.
MCS President C.O. Turner III commented that the merger accomplishes many of the strategic goals of both Pacer and MCS. "Changes in our customers' needs and in our industry have highlighted the importance of drastically increasing our intermodal volumes, capitalizing on complementary equipment flows and drayage operations, and expanding our menu of services. This merger fulfills all those goals. Also, in a larger company, there will be expanded opportunities for the professional growth of our employees." Turner will remain involved in the business.
Expansions in Both Intermodal and Logistics Sectors
MCS is the fourth intermodal transportation firm to join the Pacer group since December, 1997, when Pacer (then known as Pacific Motor Transport) combined operations with the Interstate Consolidation group (Interstate), Los Angeles-based providers of intermodal marketing, cartage and consolidation services.
Earlier this year, Pacer merged with both Stutz & Company (Stutz) of Kansas City and the Cross Con group of Chicago. The operations of Stutz were consolidated into Pacer's DeSoto, Texas-based flatbed and specialized heavy-haul trucking unit, Pacer Transport.
The fifth acquisition was a pair of a supply-chain management firms, Professional Logistics Management Co. (PLMC), and 3PL Corporation (3PL), both of Lafayette, California.
Improved Volumes, Freight Balance and Revenues
The MCS merger strengthens Pacer's position as one of the largest intermodal marketing companies (brokers of intermodal transportation) and providers of related logistics services in North America, now accounting for some 314,000 truckload-equivalent moves annually.
Equally important, it brings to the combined company a strong westbound traffic flow that originates in the Southeastern region, 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.
From $86.7 million in 1996 on a stand-alone basis, Pacer's revenues are expected to exceed $375 million for the 12-month period ended Dec. 31, 1998, on a pro forma basis after giving effect to the mergers with Interstate, Stutz, Cross Con, PLMC and MCS. Revenues of MCS for the 12 month period ended Dec. 31, 1998, are expected to exceed $100 million.
MCS also brings to the company a broad and distinguished customer base; a solid, long-term management and employee base; an infrastructure of owner-operator trucking suppliers; and broader geographical representation, Orris added.
Company description -- The Pacer group of companies provides a broad range of intermodal, trucking and logistics services -- all available through a single provider -- through its national network of sales agents, independent contractors and railroad/drayage partnerships. Its Pacer Logistics unit provides consolidation, warehousing, cross-dock, cartage, less-than-truckload and other supply-chain-management services. Its Pacer Intermodal division, now including MCS, arranges intermodal freight movements as well as truckload drayage and truck brokerage throughout North America for manufacturers and retailers, and provides customized electronic tracking, analysis of accessorial charges, and other information support. The Pacer Transport unit provides flatbed and heavy-haul specialized trucking services, as well as specialized consolidation services for rail carriers and intermodal rail car maintenance and repair. The Pacer group has some 635 employees, of which 215 pertain to MCS; 134 agents; and a network of more than 815 owner-operators. The group is based in Lafayette, California.
FACT SHEET
Pacer International - MCS Merger
PACER INTERNATIONAL MCS
(figures not inclusive of MCS
unless otherwise indicated)
HEADQUARTERS Lafayette, California Memphis, Tennessee
26 branch offices
in N. Amer.
KEY DATES Pacer (then Pacific Established 1968
Motor Transport) acquired
from Union Pacific RR by
Donald C. Orris group
4/1997; MCS is 5th
subsequent merger.
PRINCIPAL
BUS. Intermodal marketing, Intermodal marketing,
specialized trucking, truck brokerage,
logistics services, logistics services,
consolidation, truck consolidation, cartage
brokerage,
less-than-truckload
transport, cartage,
warehousing, rail car M&R
EMPLOYEES 420 215
AGENTS 120 14
CONTRACT
DRIVERS 730 86
TRANSP.
ASSETS leased flatbed & not significant
heavy-haul trucks,
trailers, warehouses,
cross-dock &
yard facilities
KEY MGT. Donald C. Orris, CEO, C.O. Turner III, MCS Pres.
Pacer Intl.; Gary Goldfein,
Pres., Pacer Logistics;
Robert L. Cross, Pres.,
Pacer Intermodal-West;
Richard P. Hyland, Pres.,
Pacer Intermodal East;
Gerry Angeli, Pres., Pacer
Transport; Al Steiner, EVP,
Pacer Intl.; Larry C.
Yarberry, CFO
PROJECTED
REVENUES
(12 mos.
ended
12/31/98) $375 million (pro $100 million
forma, after giving
effect to mergers
with Interstate,
Stutz, Cross Con,
PLMC, MCS)
IMC NAMES
(will become
Pacer
International) ABL-Trans, Lafayette, CA; MCS, Memphis
Interstate Consolidation,
Los Angeles; Cross Con,
Chicago
SERVICE AREAS 48 states, 48 states,
Canada, Mexico Canada, Mexico
ANNUAL LOADS 180,000 134,000
RR &
STACKTRAIN
CONTRACTS APL, BNSF, CP, Amtrak, APL, BNSF, CN, CP,
CR, CSXI, IC, CR, CSXI, FEC, IC, Iowa
KCS, NS, UP Interstate, KCS, NS, UP
NOTE: Issued by: Potash & Company, Oakland
Steve Potash, 510/261-1570
Email
