Transportation and logistics provider Roadrunner Transportation Systems Inc. said today it has agreed to sell its cold chain logistics subsidiary Unitrans Inc. to Quick International Courier Inc. for $95 million in cash.
Cudahy, Wis.-based Roadrunner, which generates the bulk of its revenue from less-than-truckload (LTL) and truckload operations, said Unitrans was sold because it no longer fit in Roadrunner's portfolio. Roadrunner bought Unitrans in 2014 for $56 million.
Roadrunner is expected to use most of the proceeds to redeem a portion of its preferred stock. The transaction is expected to close sometime during the third calendar quarter, Roadrunner said.
Based in Los Angeles, Unitrans' niche is in providing logistics services to support the life sciences market. Unitrans is considered a well-run company Quick International Courier, with solid margins in a high-demand segment of logistics. However, it was out of step with Roadrunner's core business of offering truckload and LTL services through an "asset-light" model, where it effectively controls capacity without employing drivers or owning equipment. By contrast, New York-based Quick specializes in the expedited movement of life sciences products.
In a note today, Benjamin J. Hartford, transport analyst at investment firm Robert W. Baird & Co., said the sale is a "logical step" by new Roadrunner CEO Curt Stoelting to refocus and narrow the company's product portfolio strategy. Roadrunner acquired 34 companies between 2005 and 2015, a strategy that left it with an organization of 20 operating units that was slow to respond to difficult market conditions during an industry downturn in 2016.
In January, the company disclosed that it would restate four years of financial results because of unrecorded expenses at two of its acquired companies. Roadrunner has yet to file its annual 10-K report for 2016, citing the complex process of investigating the causes of accounting discrepancies and reviewing its internal control over financial reporting and compliance programs. Under Securities and Exchange Commission rules, the company has until Sept. 30 to do so.