This puts us in the States in a big way,’ says CEO
Canadian transport and logistics company Fastfrate Group said Thursday it has acquired a controlling stake in Canadian truckload and logistics provider Challenger Group for an undisclosed sum.
The transaction, which will combine two old-line, Toronto-based companies with about CA$1 billion in annual revenue, dramatically expands Fastfrate’s cross-border trucking exposure, CEO Manny Calandrino said in a phone interview.
Challenger generates between 65% and 70% of its revenue from cross-border truckload services, said Calandrino, who will continue as Fastfrate’s CEO.
“This puts us in the States in a big way,” he said of the proposed acquisition.
The deal will make Fastfrate one of the largest cross-border trucking and logistics companies in Canada. The combined companies operate more than 5,500 pieces of equipment and 1.2 million square feet of facilities. They employ about 5,000 workers, all of whom are expected to remain.
The deal is expected to close by Aug. 1, Calandrino said. It must be approved by Canadian antitrust authorities, although Calandrino expects no opposition because the transaction is adding capacity to the market, which ultimately benefits shippers.
The two companies will operate separately, and Challenger will keep its name. Jim Peeples, Challenger’s president and COO, will become Challenger’s CEO and retain his president’s title. Dan Einwechter will remain Challenger’s chairman and will join Fastfrate’s board.
Fastfrate entered the cross-border market in August 2020 when it acquired Bestway Group, a relatively small Alberta-based LTL carrier and logistics provider. Fastfrate has a sizable intra-Canadian presence in LTL, drayage, intermodal, transloading, warehousing and distribution and home delivery services.Still, Canaldrino recognized that what was missing from Fastfrate’s diversified portfolio was a “good-sized trucking company.
Much northbound surface traffic into Canada enters via truckload services. A key opportunity will be the ability to break down Challenger’s truckload freight inside Canada and put it in the Fastfrate domestic LTL network, Calandrino said.