RailAmerica Conveys Canadian Motor Carrier Business to Laidlaw Carriers; Strategic Alliance Created Between Companies
December 8, 1998 09:48 AM
BOCA RATON, Fla.--(BUSINESS WIRE)--Dec. 8, 1998--RailAmerica, Inc. RAIL announced today that it has sold and leased substantially all of the operating assets of its Canadian-based motor carrier business, Steel City Carriers, Ltd. ("Steel City"), to Laidlaw Carriers, Inc. ("Laidlaw"), an operating subsidiary of Ontario, Canada-based Contrans Corporation .
Additionally, the companies announced that as part of a newly-formed strategic alliance, Laidlaw has agreed to purchase a significant number of new truck trailers from a RailAmerica subsidiary, and both parties have also reached an accord to pursue rail/truck intermodal opportunities throughout North America.
Laidlaw, one of Canada's largest and most profitable motor carriers, has agreed to lease Steel City's terminal facility in Sault Ste. Marie, Ontario and substantially all of its tractors and trailer units. Laidlaw, which also purchased certain other operating assets from Steel City, commenced operations at the former Steel City facility on December 1, 1998.
As part of the strategic alliance between the companies, Laidlaw has agreed to purchase a minimum of 25 new truck trailers from RailAmerica's specialty truck trailer manufacturer, Kalyn Siebert Canada, Inc., within the next 60 days. Kalyn Siebert Canada, located in Trois-Rivieres, Quebec, Canada, produces customized bulk-hauling truck trailers used in the solid waste, agricultural and construction industries.
Commenting on the deal, RailAmerica's Chairman, President and CEO Gary O. Marino said, "This strategic alliance allows both companies to meet critical objectives that should have a favorable impact on profitability going forward. The transaction is certainly a 'win-win' situation for both parties as Laidlaw gains new customers and an entre into a new region, while RailAmerica benefits from new business for our truck trailer manufacturing division. Even more exciting is the synergistic opportunities that we both may realize through the new business initiatives available to us in the North American intermodal marketplace."
Contrans Corporation had fiscal 1998 revenues of almost C$200 million (US$130 million). Laidlaw Carriers is a subsidiary of Contrans Corporation, a publicly traded holding company based in Woodstock, Ontario, Canada. Through its subsidiaries, Laidlaw Carriers, Inc. and Brookville Carriers, Inc., Contrans operates a fleet of 900 tractors and 1,500 trailers throughout North America.
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