A familiar northern trucking company headquartered in North Bay, but with terminals in Sudbury and Mississauga, has been sold to a Toronto firm.
ProNorth Transportation has been bought by Titanium Transportation Group, in a deal expected to close Dec. 1.
The company was founded by Brian Glass in 1986 and has a well-established customer base throughout Ontario.
In a letter to employees obtained by BayToday.com in North Bay, Glass wrote, "The sale will position ProNorth to become modern, competitive (and) efficient, and will be able to better service its customer base, both present and future.
"Titanium provides a unique and compelling opportunity to participate in the rapid growth of a new generation transportation company. We are excited to be joining the Titanium team."
Glass becomes a shareholder of Titanium Transportation.
ProNorth provides truckload van shipping services to more than 250 customers, with 110 power units, 280 trailers and 150 employees and independent owner-operators. The acquisition of ProNorth increases Titanium's fleet size by more than 30 per cent, to a total of over 450 power units and more than 1,200 trailers.
Based in North Bay, with terminals in Mississauga and Sudbury, ProNorth also has facilities in Timmins.
Under the terms of the deal, Titanium acquires all of ProNorth’s stock for a total cash consideration of $5.8 million and 1,750,000 common shares. Upon closing, ProNorth is expected to have approximately $1.7 million of cash on hand.
The remaining $4.1 million of the cash consideration will be funded using Titanium's existing credit facilities. The shares of Titanium to be issued in connection with the transaction will be subject to a two-year escrow arrangement.
Titanium will also be purchasing some real estate used in the operation of ProNorth for the aggregate purchase price of $2.5 million. The purchase of the property will be funded using $250,000 of cash on hand and a $2.25 million nine-year, interest-free, vendor take back financing agreement.
"It's all good," Ted Daniel, CEO of Titanium told BayToday, said of the deal. "It will create opportunity for ProNorth to expand."
The company is not looking at laying off any workers, Daniel said. In fact, Titanium is looking to grow.
“We're a public company with a lot of money in the bank to invest in our future growth and get our shareholders a good rate of return over the next five to 10 years,” he said. "So no job losses. We're hoping to increase the amount of freight by using our ability to expand our network, not shrink it."
Daniel says there will be other acquisitions.
This acquisition expands Titanium's geographic profile in Northern Ontario, allows for synergies with Titanium's existing lanes and Bracebridge terminal, and creates a platform for growth in the region, he said. In addition, ProNorth's dry van business is highly complementary to Titanium's existing flatbed business in Northern Ontario.
Titanium services Canada and the United States, with approximately 350 power units, 1,000 trailers and 400 employees and independent owner operators.
The company has also been ranked by PROFIT magazine as one of Canada's Fastest Growing Companies for seven consecutive years.
