(TSX: MTL) Mullen Group Ltd. (“Mullen Group“, “We“, “Our” and/or the “Corporation“) is pleased to announce that it has entered into a letter of intent (“LOI“) to acquire Mississauga based APPS Transport Group Inc. (“APPS“) and the businesses: APPS Cartage Inc. and APPS Cargo Terminals Inc. The LOI contemplates standard due diligence and the execution of a purchase and sale agreement (“PSA“), both of which have been initiated. The transaction is scheduled to close on June 1, 2021, subject to regulatory approval.
APPS (www.appsexpress.com), a well-established transportation and logistics company founded in 1985, provides less-than-truckload (LTL) along with truckload, intermodal and some warehousing services primarily from their head office in Mississauga, Ontario, with services extending into five locations throughout western Canada. Through a combination of company trucks, independent owner operators, and interline partners, APPS and its dedicated group of 300 plus employees, service the commercial supply; food & beverage; and retail & consumer sectors which supports the business-to-business (B2B) along with the business-to-consumer (B2C) E-Commerce space.
“I am truly excited this morning. This announcement is consistent with the strategy we have outlined to our loyal shareholders. We invest in companies that meet the goal of expanding our business in key markets within Canada. The other part of our strategy, a trademark of the Mullen Group, is investing in businesses that can operate as standalone entities within our diversified logistics service offerings. APPS meets both objectives and is precisely the type of opportunity we have patiently waited to acquire. This is a quality brand named company based in Toronto with an outstanding reputation of providing superior customer service. No one knows APPS better than Rob McDonald, the founder, which is why I am so pleased he has agreed to continue in his current role and will oversee, grow and manage the business along with his business partners and loyal employees. Rob and I agreed that there is an excellent business and cultural fit between our respective organizations. Consumer demand is expected to increase as soon as the Governments reopen the economy. In addition, we have already seen how the supply chain has been disrupted by online shopping. Massive companies, such as Amazon, are capitalizing on the emergence of E-Commerce, which is rapidly becoming a dominant consumer trend. We know we must adapt which is why we are joining together. We will be better positioned, not just to compete with these large disrupters but to service those smaller customers and retailers that need access to both technology solutions and a large terminal network, which is our access point to customers across the Canadian marketplace,” commented Mr. Murray K. Mullen, Chairman and Chief Executive Officer.
APPS will operate within Mullen Group’s Less-Than-Truckload Segment (“LTL Segment“) and it is expected to generate annualized revenue of approximately $90.0 million and OIBDA margins consistent with the LTL Segment. Mullen Group will be funding the transaction from existing cash and credit lines.