Conference Call Scheduled for 11:00 a.m. Eastern Time Tomorrow
RANCHO DOMINGUEZ, Calif., March 7, 2006 (PRIMEZONE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today announced that it has acquired Portland-based Market Industries, Ltd., a privately held provider of third-party logistics services and multi-modal transportation capacity solutions specializing in truck brokerage, for $197.1 million in cash, subject to certain closing, working capital and tax-related adjustments. Market Industries provides a variety of domestic freight management services, branded under the trade name Market Transport Services, to clients across the U.S. and Canada.
For its fiscal year ended December 31, 2005, Market Industries generated unaudited pro forma gross revenues of approximately $358.9 million, which include the pro forma full-year impact of their two acquisitions made during 2005 as if they had occurred on December 31, 2004. UTi expects the acquisition of Market Industries to be modestly accretive to its earnings in the first year.
"This acquisition is a further testament to UTi's commitment to deliver value in its long-term strategic journey," said Roger I. MacFarlane, chief executive officer of UTi Worldwide. "We believe that freight management is an important and necessary element in providing our clients a truly global integrated logistics solution, which is the goal of our NextLeap strategy. Today's acquisition, which complements our September 2005 acquisition of Concentrek, brings UTi one step closer to that goal."
Over a 36-year history, Market Industries has built a broad portfolio of transportation services, including truckload brokerage, dedicated transportation, intermodal services and other supply chain management functions. It is one of the largest independent, asset-light transportation companies in the U.S., featuring a network of agents, broker affiliates, owner-operators, select company-owned assets and technology and information systems to design and deliver transportation services and capacity solutions to its customer base.
With an employee count of approximately 600, along with independent contractor associates and approximately 175 independent affiliates and agent offices, Market Industries facilitates the movement of more than 300,000 truckloads each year and provides services to over 5,000 customers across various vertical markets. The company also contracts with more than 35,000 motor carriers and has access through common carrier agreements to more than one million power units.
P. Brian Fitzgerald, chairman and chief executive officer of Market Industries, added, "On behalf of our executive management team and employees, we are proud to become an integral part of UTi's growing global logistics platform. UTi, with its vast array of best-in-class supply chain solutions, is a great strategic partner for us, and we are excited to begin offering an expanded portfolio of capabilities to our client base. With our existing expertise in transportation management and truck brokerage, we believe we will be a valuable contributor to the continued growth and success of the UTi organization."
Fitzgerald, along with Market Industries' President Charles F. Hornecker, Division Presidents Gary M. Wilson and Donald R. Farthing, and Chief Financial Officer Matthew J. Tachouet, are expected to continue in their current roles with the company.
"Under the leadership of a seasoned management team with more than 113 years of cumulative service in the transportation industry, Market Industries has an impressive track record of organic growth and a history of successfully integrating strategic acquisitions," MacFarlane said. "We are very pleased that, like UTi, Market Industries' corporate culture focuses on establishing deep relationships with clients in order to become the primary or single-source provider of supply chain solutions.
"We look forward to welcoming the entire Market Industries team to our UTi family. We are confident that Market Industries will further strengthen our competitive advantage and increase the opportunities for UTi to provide even greater value to both potential and current clients," MacFarlane said.
The acquisition of Market Industries was funded by a combination of current cash reserves of UTi Worldwide and the proceeds from a new $150 million senior secured six-month term credit facility. To repay the credit facility, UTi Worldwide is proposing to raise up to $200 million pursuant to an anticipated private placement of senior notes. UTi Worldwide is also commencing the process of proceeding with a new $250 million worldwide revolving credit facility.
BB&T Capital Markets, a division of Scott & Stringfellow, Inc., served as exclusive advisor to Market Industries, Ltd.
This announcement does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities referred to herein in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Investor Conference Call
UTi management will host an investor conference call tomorrow morning, Wednesday, March 8, at 8:00 a.m. PST (11:00 a.m. EST) to review additional information related to the acquisition of Market Industries. The call will be open to all interested investors through a live, listen-only audio broadcast available over the Internet at www.go2uti.com. For those who are not able to listen to the live broadcast, the call will be archived for two weeks through 5:00 p.m. PST, March 22, 2006. A telephonic playback of the conference call also will be available from approximately 10:00 a.m. PST (1:00 p.m. EST) March 8, through 8:59 p.m. PST (11:59 p.m. EST) March 10, by calling 800-642-1687 (domestic) or 706-645-9291 (international) and using Reservation No. 6222088.
About UTi Worldwide
UTi Worldwide Inc. is an international, non-asset based global integrated logistics company providing air and ocean freight forwarding, contract logistics, customs brokerage and other supply chain management services. The company serves a large and diverse base of global and local companies, including customers operating in industries with unique supply chain requirements such as the pharmaceutical, apparel, chemical, automotive and technology industries. The company seeks to use its global network, proprietary information technology systems, relationships with transportation providers and expertise in outsourced logistics services to deliver competitive advantage to each of its customers' global supply chains.
Safe Harbor Statement
Certain statements in this news release may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The company intends that all such statements be subject to the "safe-harbor" provisions contained in those sections. Such statements may include, but are not limited to, the anticipated contributions by Market Industries to UTi Worldwide, the expectation that the transaction will be modestly accretive in the first year and, the company's discussion of its growth strategy to provide complete outsourcing solutions, and any other statements, which are not historical facts. Many important factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements, including integration risks associated with the Market Industries acquisition, increased competition; integration risks associated with acquisitions; the effects of changes in foreign exchange rates; changes in the company's effective tax rates and the possibility that certain expected acquisition related tax consequences will not be realized; industry consolidation making it more difficult to compete against larger companies; general economic, political and market conditions, including inventory build-up, economic slowdowns and consumer confidence; work stoppages or slowdowns or other material interruptions in transportation services; risks of international operations; the success and effects of new strategies; disruptions caused by conflicts, wars and terrorism; and the other risks and uncertainties described in the company's filings with the Securities and Exchange Commission. Although UTi believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by UTi or any other person that UTi's objectives or plans will be achieved. The historical pro forma results achieved by Market Industries are not necessarily indicative of its future prospects. UTi undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.