vCard. The transaction is expected to close in Q4, subject to customary closing conditions. Media. LaserShip/OnTrac, the largest regional e-commerce parcel carrier in the U.S. and leader in e-commerce last-mile delivery, today announced the appointment of . Its also great for the industry in general and it is exciting to see significant investment continue to pour into the logistics and delivery space.. . googletag.enableServices(); OnTrac is a SmartWay Transport Partner, a USPS Workshare Partner, and integrates with over thirty different multi-carrier software providers. In a deal that banking sources said was consummated about two weeks ago, regional parcel delivery carrier LaserShip, which is owned by PE firm American Securities LLC, acquired fellow regional carrier OnTrac for what is believed to be $1.3 billion, a significant sum for a regional parcel company. - The combined company will be a leading national network and solution for e-commerce retailers and other shipping customers. American Securities's largest holding is Blue Bird Corp with . googletag.pubads().enableSingleRequest(); EBITDA margins approaching 10% or financial leverage being sustained near 7x debt/EBITDA would pressure the ratings down. LaserShip is funded by American Securities. Its the next chapter in our steadfast commitment to the On-Time for Less promise we make to our shippers with every package, every day.. We are at the beginning of a shift in package delivery, where local and regional volume will continue to grow as a percentage of total, with inventory moving closer to demand, Skiver shared in a LinkedIn post. That month, FedEx closed on a deal announced the prior October to acquire Caliber System Inc., whose Roadway Package System (RPS) unit had been quietly nibbling at UPS competitive position for 13 years. B2C is profitable, you just have to change how you approach it from an operations, pricing and service delivery perspective. Its enough to comfortably replace my old jobs income, especially considering I only work about 11 to 12 hours a week from home. Fast-growing parcel carrier LaserShip Inc. agreed to buy Western U.S. rival OnTrac Logistics Inc. in an approximately $1.3 billion deal . Holifield was named the companys CEO in October 2021 after a long career at The Home Depot Inc. (NYSE: HD). Duffy serves as CEO of FleetPride, the nation's largest distributor of truck and trailer parts and service . American Securities Announces Agreement to Sell Milk Specialties Global. Edit Funding Rounds Section. About Greenbriar Equity Group We hope to make the world a better place by giving back to the communities in which we live and work. Address. The company's independent contractor model also exposes LaserShip to potential shifts in the regulatory environment in regards to classifying independent contractors that could negatively impact its business. In a note to investors, Moodys said the acquisition of OnTrac was a transformative step toward being a national player by combining east and west coast networks. Further, LaserShip faces high turnover of its independent contractors which could challenge the company's service times and quality.Moody's expects LaserShip to have adequate liquidity, with nominal cash balances balanced by availability under the new $75 million revolver and positive free cash flow, with at least low-single digit free cash flow to debt. At the same time, analysts sounded a note of caution in terms of the combined companys ability to maintain current service levels as it scales, as did Skiver. I predict more consolidation of regionals especially with the rate increase being slapped on shippers by UPS and FedEx this year. }); Regional parcel delivery carrier LaserShip/OnTrac said late Tuesday that it has named Mike Duffy the companys new CEO, effective immediately. They will operate separately for the balance of the year, with integration taking place in 2022. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Josh Dinneen, Chief Commercial Officer at LaserShip and OnTrac, told LM that this transcontinental service is a huge win for retailers, as it empowers them to reach consumers in the countrys most populated areas with faster, reliable, cost-effective home delivery. It stands to reason, then, that a merger of regional parcel delivery carriers LaserShip and OnTrac, with $1.7 billion in combined annual revenue between them, wouldnt appear on the giants radar. Copyright 2023, All Rights Reserved, FreightWaves, Inc, Duffy named to run LaserShip/OnTrac as Holifield steps down. Prior to joining American Securities, Will was a Senior Managing Director at . That may be true up to a point. Only wholly-owned subsidiaries are required to provide subsidiary guarantees, posing risks of potential guarantee release if there were a partial change in ownership. VIENNA, Va. and CHANDLER, Ariz. (PRWEB) American Securities and Greenbriar, which own LaserShip, will provide additional equity financing for the deal and continue to provide strategic support for the combined company. Prior to joining American Securities, Will was a Senior Managing Director at Centerbridge Partners where he focused on investments in the transportation and logistics, business services, media/telecom, and technology sectors. In May, it was sold to private equity firm American Securities by fellow PE outfit Greenbriar Equity Group LP, which had owned it since 2018. American Securities is a hedge fund with 20 clients and discretionary assets under management (AUM) of $21,161,740,410 (Form ADV from 2022-03-31). googletag.defineSlot('/21776187881/FW_Super_Leaderboard', [[300, 50], [970, 90], [300, 100], [728, 90]], 'div-gpt-ad-1668097889433-0').defineSizeMapping(gptSizeMaps.banner2).addService(googletag.pubads()); Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. There is a player that might be emerging on the U.S. parcel delivery landscape: private equity. The sale is expected to close near the end of the month with a tentative date of October 25, 2021. Listen to article. Rob Martinez, founder and co-CEO of consultancy Shipware LLC, said he was surprised by the announcement. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. HERE http://www.workssilver.com. This should allow LaserShip to maintain EBITDA margins in the mid-teens range, which should lead to debt/EBITDA in the low-6x range by end of 2021. Diego Kantt is the current Principal at American Securities. In a news release, the companies said the two will form "a leading national network and solution" for shippers. +1 (212) 310-8239. [email protected]. LaserShip is the leader in e-commerce last-mile delivery for retailers and shippers that desire reduced transit times and increased flexibility within their supply chain. Faster transit time than national carriers. Duffy joined LaserShip/OnTracs board last May. The OnTrac service area includes California and the major metropolitan areas of Arizona, Nevada, Oregon, Washington, Utah, Colorado, and Idahoan area that is home to over 65 million consumers. One top executive said that the news was unexpected and that there was no inkling of a change in the works. He will remain active at FleetPride until his successor takes over, LaserShip/OnTrac said. We enjoy our work and the relationships that come from it. It will be the only pure-play national e-commerce solution in last-mile parcel delivery and will enhance customers ability to meet growing demand in the consumer delivery market. Following their late 2021 announcement, in which Vienna, Va.-based LaserShip, the largest regional e-commerce parcel carrier and last-mile delivery services provider, and Chandler, Ariz.-based regional shipping services provider OnTrac, announced they had entered into a definitive agreement to merge, with LaserShip acquiring OnTrac for $1.3 billion, the companies last week stated they are . window.googletag = window.googletag || {cmd: []}; Holifield formally assumed the role on Nov. 8, 2021. Greenbriar looks to identify companies with proven management teams capitalizing on strong long-term growth prospects that can benefit from Greenbriar's deep sectoral expertise and strategic insight alongside our proven operating capabilities and network of senior executive relationships. OnTrac is a SmartWay Transport Partner, a USPS Workshare Partner, and integrates with over thirty different multi-carrier software providers. googletag.enableServices(); Last-mile delivery reaching over 140M people in the U.S.! For more information, visit american-securities.com. Whats more, Dinneen explained that the transcontinental service launch was based on overwhelming feedback LaserShip and OnTrac received from their customers about the need for a carrier with their speed, reliability, cost-savings and service, but with nationwide scale. googletag.pubads().enableSingleRequest(); Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided AS IS without warranty of any kind. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moodys Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading Investor Relations Corporate Governance Director and Shareholder Affiliation Policy.Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODYS affiliate, Moodys Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moodys Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). Prior to Centerbridge, Will was a Principal at Spectrum Equity Investors and Spire Capital Partners. Still, cost-conscious e-commerce shippers love doing business with the regionals because they generally receive more favorable pricing, Picard said. Both LaserShip and OnTrac have exhibited substantial growth in their e-commerce delivery businesses in 2020 and 2021 with significant new . However, MOODYS is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.To the extent permitted by law, MOODYS and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODYS or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODYS.To the extent permitted by law, MOODYS and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODYS or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODYS IN ANY FORM OR MANNER WHATSOEVER.Moodys Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moodys Corporation (MCO), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moodys Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moodys Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,000,000. (2 minutes) Last-mile delivery specialist LaserShip Inc. on Friday said it named Mark Holifield chief executive, poaching the veteran supply . MOODYS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. The combined company will bring together two complementary operating footprints across the United States. , Diversified Healthcare: Q4 Earnings Snapshot, UPDATE 1-US pick to head World Bank, ex-Mastercard CEO Banga, starts 'charm offensive', UPDATE 1-Cardinal Health, McKesson prevail in Georgia families' opioid trial, Asian Stocks Face Pressure as Yields Move Higher: Markets Wrap, UPDATE 1-US Supreme Court doubt over student debt relief looms over Biden agenda. 703-761-9030 October 13, 2021. OnTrac was founded in 1991 and has become a top choice for e-commerce and companies looking to speed up parcel distribution without the additional costs associated with national carriers. http://www.greenbriarequity.com, For LaserShip: }); Depending on how the holiday season pans out, FedEx Corp. and UPS Inc. will get close to $200 billion in combined annual revenue by the time they finish their reporting years: UPS on Dec. 31 and FedExs the following May 31. About. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Our focus is always on the long-term best interests of the companies and investors we serve. Regional carrier LaserShip is acquiring competitor OnTrac in a $1.3 billion deal, in one fell swoop changing the equation in domestic last-mile parcel delivery by giving the combined entity coverage of three-quarters of the continental U.S. as ecommerce demand continues to soar. The combined company will bring together two complementary operating footprints across the United States. LaserShip has acquired OnTrac Shipping on Oct 13, 2021. LaserShip's proven, industry-leading last-mile delivery platform will help you acquire and retain customers with faster delivery while building capacity and flexibility within your supply chain. But the idea was never workable in terms of network integration, revenue sharing and how the partnership would handle customer relationships. About American Securities If [LaserShip/OnTrac] doubled in volume capacity which they cant for a very long time theyre still insignificant compared to the behemoths, said Rob Martinez, Shipwares founder and co-CEO. 1.9 Days. This allowed the carriers to deliver more packages within specific time windows, and at attractive rates and fewer delivery surcharges. The combined company will be a leading national network and solution for e-commerce retailers and other shipping customers. Greenbriar looks to identify companies with proven management teams capitalizing on strong long-term growth prospects that can benefit from Greenbriar's deep sectoral expertise and strategic insight alongside our proven operating capabilities and network of senior executive relationships. The dot-com boom of the late 1990s eventually pushed the Vienna, Virginia-based concern into the parcel-delivery world. It does offer LaserShip flexibility to scale operations, dependent on its ability to attract and maintain independent contractors as volumes increase. The Caa2 rating on the second lien term loan reflects its subordinated position to the first lien debt.Following are some of the preliminary credit agreement terms, which remain subject to market acceptance.As proposed, the credit facilities are expected to contain covenant flexibility for transactions that could adversely affect creditors, including the ability to incur incremental term loan facilities in an aggregate amount not to exceed the greater of EBITDA as of the closing date and 100% of trailing four quarter EBITDA; plus an unlimited amount so long as First Lien Leverage Ratio does not exceed the greater of the ratio at the closing date or most recently ended test period (if pari passu secured). googletag.enableServices(); The revolver will be subject to a springing net leverage covenant (ratio to be determined), tested if borrowings exceed 35% of the revolver commitment. FreightWaves has requested an interview with Duffy. There is no explicit protective language limiting such releases.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSThe ratings could be upgraded if LaserShip demonstrates improving and sustainable operating leverage as delivery volumes increase, such that EBITDA margins are maintained in at least the mid-teens range and debt/EBITDA decreases toward 5x. LaserShip, Inc., the largest regional e-commerce parcel carrier in the U.S. and leader in last-mile delivery operating primarily in the eastern United States, and OnTrac Logistics, Inc., a leading e-commerce parcel logistics company operating primarily in the western United States, announced today that they have entered into a definitive agreement to merge. gptAdSlots.push(gptSlot); (FS) Private equity firms American Securities and Greenbriar-backed LaserShip, an e-commerce last-mile delivery services provider, agreed to merge with OnTrac Logistics, a logistics services provider, in a $1.3bn deal. window.googletag = window.googletag || {cmd: []}; The most obvious path forward, then, is to expand its delivery coverage to fill out the middle of the country, according to industry experts. "We are pleased to welcome Mark as CEO of LaserShip," said Will Manuel, Chairman of the Board of LaserShip and a Managing Director of American Securities. 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