Mullen Group Ltd. (“Mullen Group“, “We“, “Our” and/or the “Corporation“) is pleased to announce that it has signed a definitive agreement and closed the acquisition of QuadExpress (“QuadExpress“), the non asset based third party logistics provider business of Quad/Graphics, Inc. (“QUAD“) (NYSE: QUAD) for $40.0 million USD on a cash free, debt free basis before working capital adjustments.
“Today‘s announcement is significant to our organization for several reasons with the most important being that we just opened the door to future opportunities. We already have an extensive network in Canada and will continue to invest where we find great companies to add to our service offerings. However, there are limits to just how much we can grow in the Canadian market. The U.S. market, on the other hand, is a new market for our company, offering tremendous opportunity. There is no doubt the U.S. market is key to the North American supply chain and we need to be there. With this acquisition we gain immediate access to one of the largest markets in the world,” commented Mr. Murray K. Mullen, Chairman and Chief Executive Officer.
QuadExpress, headquartered in Naperville, Illinois, is a global, technology enabled, non-asset based 3PL service provider focused on freight brokerage services across multiple modes of transportation. As part of the acquisition, Mullen Group acquired SilverExpress, the proprietary transportation management system technology platform that QuadExpress uses to align customer shipments with transportation carriers. In addition, the parties entered into: 1) a Transition Services Agreement in which QUAD will work with Mullen Group to facilitate the seamless transition of all business matters over the next 90-days; and 2) a Continuing Transportation Services Agreement whereby QUAD will continue to use QuadExpress for certain of its 3PL needs for a period of 24-months.
“I would like to thank the senior leadership team at QUAD for engaging with our company on this transaction. Early on in the negotiating we both identified that our respective companies were based upon similar principles and values, the most important being that the acquisition would be seamless to everyone as well as beneficial to the people currently managing and overseeing QuadExpress. This was important not just to QUAD, it was fundamental to the transaction. During due diligence I had the opportunity to meet the senior leadership team at QuadExpress, which quite simply reinforced my interest in consummating this deal. In fact, the entire senior team – Pat Malone, Dan Hall, Patrick Billie, Erich Fichtner, and Stephen Schnell will continue to manage, oversee and grow the business. And they will be bringing along their entire teams, the best way to ensure a continuity of service to all customers,” added Mr. Mullen.
QuadExpress provides 3PL service to a diverse group of 1,700 North American customers utilizing over 6,000 transportation companies. In 2020, QuadExpress generated annual gross revenue of approximately $135.0 million USD with operating margins consistent with the North American 3PL sector.
“The QuadExpress business model is precisely the opportunity we have been looking for. They are a 3PL service provider utilizing SilverExpress, a proprietary customer interface technology built ‘by a shipper for shippers‘. Revenues are generated from providing a combination of traditional 3PL service offerings to customers and from partnering with agents, who have customer relations and utilize the SilverExpress platform to manage their business. This unique business model will allow us to focus on investing in the technology platform, ensuring the business can meet the ever increasing demands associated with the emergence of digital integration. The agents get access to a world class technology platform allowing them to focus on the customer relationship. And the last piece of the puzzle is the carrier network. QuadExpress has over 6,000 providers which will only grow and expand with our involvement. I believe this is a scalable business model and is a great investment opportunity,” said Mr. Mullen.
