By Jeff Berman, Group News Editor · September 17, 2020
Earlier this week, Greeneville, Tenn.-based asset-light freight and logistics services provider Forward Air Corporation announced it has acquired the assets of Johnson City, Tenn.-based CLW Delivery Inc., a privately held final mile provider specializing in last-mile logistics and in-home installation services for national retailers and manufacturers, for cash consideration of $5.5 million.
Forward Air said it anticipates that this transaction, which will be funded from cash on hand, will close in October 2020. And it also noted that this acquisition of part of a growth strategy it is executing that is focused on organic infrastructure investment, including its ongoing LTL (less-than-truckload) network expansion and its organic investments, in the form of acquiring complementary businesses.
What’s more, the company noted that bringing CLW into the fold supports Forward’s strategic growth plan by expanding the footprint of Forward’s Final Mile business into an additional 14 markets. And it added that with this acquisition, coupled with FSA Logistix and Linn Star Transfer in 2019, Forward Final Mile has “experienced a period of hypergrowth, expanding from eight operating locations into 110 in under two years. “
CLW is expected to contribute $20 million of revenue and $1 million of EBITDA on an annualized basis, noted Michael J. Morris, Forward AirSenior Vice President and CFO, in a statement.
“Our Final Mile business is a key area of growth for Forward,” said Tom Schmitt, President, Forward Air Chairman and CEO, in the same statement. “CLW offers a unique opportunity to expand our Final Mile service offering by stretching into customized installations and builder projects, which is something we haven’t provided in the past. Bringing in CLW marks our commitment to advancing our capabilities within this space.”
A Forward Air spokesman told LM that there were multiple drivers for acquiring CLW Delivery.
“CLW is a reputable player in the industry, and their footprint complements our existing final mile footprint nicely,” he said. “Another thing we like about CLW is their ‘asset-light’ model. The assets we acquired were relevant to the continuation of the business service. The acquisition of CLW helps expand our customer base and our service offering into customized installations and various builder projects. This is a step toward advancing our capabilities within the final mile delivery space, and supporting growth in a new vertical.”
As for the main competitive advantages of this deal, from a Forward Air perspective, the spokesman pointed to how the company has increased its footprint within the final mile space, while also adding bench strength, saying that this acquisition expanded customer relations and allowed it to add business segment verticals.
September 17, 2020