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Forward Air Buys Total Quality for $66 Million, Plus

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March 4, 2013 | Comments (0)

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On Monday, freight forwarder Forward Air (NASDAQ: FWRD  ) announced that it has acquired sensitive cargo transporter Total Quality (TQI) of Grand Haven Mich.

In a statement announcing the acquisition, Forward Air explained that TQI adds "unmatched" capability in secure, temperature-controlled transport of pharmaceutical and biotech products, bringing superior "margins and returns" to boot. Forward Air expects the acquisition to be accretive to 2013 earnings.

Paying $66 million upfront, plus a potential earn-out of $5 million, Forward Air is valuing TQI at roughly 1.3 times 2012 revenues of $54.8 million -- a significant discount to Forward Air's own 1.9 sales valuation. Accordingly, investors rewarded Forward Air with a big 1.5% increase in share price today. The shares closed at $37.85.

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Fool contributor Rich Smith and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Related Tickers

5/23/2013 4:00 PM
FWRD $39.16 Up +0.15 +0.00%
Forward Air Corp CAPS Rating: *****

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