Ryder Completes Acquisition of Cardinal Logistics
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Insights
The acquisition of Cardinal Logistics by Ryder System, Inc. represents a strategic move to enhance Ryder's capabilities in the dedicated transportation sector. This sector is critical for businesses requiring reliable and consistent transportation services, particularly those in the consumer packaged goods, omnichannel, grocery, building products, automotive and industrial verticals. The addition of Cardinal's 200 operating locations, 2,900 power vehicles and 3,400 professional drivers significantly increases Ryder's operational footprint and network density.
From a market perspective, such an acquisition could signal consolidation trends within the transportation and logistics industry, where scale can lead to improved efficiency and cost savings. The mention of expected synergies suggests potential for reduced operational redundancies and optimized route planning, which can enhance profitability. Investors and stakeholders may anticipate improved service offerings and competitive positioning as a result of this deal.
Financially, the statement that the transaction is expected to be accretive in 2025 indicates that Ryder anticipates the acquisition will contribute positively to its earnings per share after that year. This timeline suggests a period of integration and synergy realization that investors should consider when assessing the short-term and long-term financial impact. The integration efforts and the achievement of synergies are crucial for the deal to meet its financial objectives and these factors will likely be closely monitored by investors and analysts alike.
Furthermore, the acquisition may affect Ryder's balance sheet in the short term due to the costs associated with the transaction and integration process. However, the long-term benefits, if synergies are realized as planned, could lead to an enhanced market share and revenue growth, which would be favorable for Ryder's financial health and stock performance.
The integration of Cardinal's dedicated fleets and professional drivers into Ryder's operations is poised to enhance supply chain resilience and flexibility. The ability to service complex route structures and provide end-to-end visibility through technology like RyderShareTM aligns with the increasing demand for dynamic supply chain solutions. In an era where supply chain disruptions are common, the capability to adapt to seasonality and fluctuating demand is a significant competitive advantage.
The acquisition's focus on dedicated contract carriage—where a third-party provider dedicates equipment and drivers exclusively to a customer—is particularly relevant in today's market. This model offers shippers predictability and control over their transportation, which is vital for industries with specialized delivery needs. The complementary nature of Cardinal's services with Ryder’s existing offerings could result in a more robust and comprehensive suite of logistics solutions for customers, potentially increasing customer retention and attracting new business.
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Acquisition complements and strengthens Ryder’s position as a leading customized dedicated transportation provider in
North America - Increases scale and network density with addition of 200 operating locations; 2,900 power vehicles; and 3,400 professional drivers
Acquisition of Cardinal Logistics complements and strengthens Ryder’s position as a leading customized dedicated transportation provider in
The Cardinal acquisition will further advance Ryder’s strategy to accelerate profitable growth in its dedicated business. Ryder expects the transaction to create synergies and to benefit both Ryder and Cardinal customers. Ryder will fully integrate Cardinal operations, facilities, and equipment into its dedicated transportation, fleet management, and supply chain businesses. The transaction is expected to be accretive in 2025 after achieving synergies and completing integration efforts.
“With complementary contractual services in many of the same industries, we gain greater economies of scale, and we can provide even more flexibility for transportation networks when seasonality and fluctuating demand inhibit the continuous use of resources,” says Steve W. Martin, senior vice president of dedicated transportation for Ryder. “Combined with our end-to-end visibility and collaboration technology RyderShareTM, we can deliver tremendous value for customers looking for more dynamic and resilient transportation solutions.”
To help ensure a seamless transition, Tom Hostetler and Vin McLoughlin, who founded Cardinal in 1997—and both of whom spent the first eight years of their careers at Ryder in the 1980s and early 1990s—will also join Ryder.
“We’ve come full circle, back to where we started, and that was purposeful,” says Tom Hostetler, CEO at Cardinal. “We chose Ryder to continue our legacy because of the company culture. We experienced firsthand Ryder’s people-first, customer-centric culture, and that had an impact on us as we built our own company.”
“We care deeply about our people and our customers, many of whom have been with us for decades. We also know Ryder. So, we know our people will have expanded opportunities in a larger, well-diversified company, and our customers will have access to an even greater breadth of products and services and the technology to support their continued growth,” says Vin McLoughlin, chairman of the board for Cardinal. “We’re excited for the future, knowing that our customers and employees are in the best possible hands with Ryder.”
Greenberg Traurig LLP acted as Ryder’s legal counsel for the transaction. William Blair LLC and McDermott Will & Emery LLP represented Cardinal.
Note to Editors:
- Ryder will provide more information regarding the acquisition during its fourth quarter conference call on Wednesday, February 14, 2024.
About Ryder System, Inc.
Ryder System, Inc. (NYSE: R) is a leading logistics and transportation company. It provides supply chain, dedicated transportation, and fleet management solutions, including warehousing and distribution, e-commerce fulfillment, last-mile delivery, managed transportation, professional drivers, freight brokerage, full-service leasing, maintenance, commercial truck rental, and used vehicle sales to some of the world’s most-recognized brands. Ryder provides services throughout
Note Regarding Forward-Looking Statements: Certain statements and information included in this news release are “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements, including our expectations with respect to the impact of the acquisition on revenue and earnings growth, cost-savings, and synergies, are based on our current plans and expectations and are subject to risks, uncertainties and assumptions. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties that could cause actual results and events to differ materially from those in the forward-looking statements including those risks set forth in our periodic filings with the Securities and Exchange Commission. New risks emerge from time to time. It is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240201783079/en/
Jonathan Mayor, jonathan_c_mayor@ryder.com
Amy Federman, afederman@ryder.com
Source: Ryder System, Inc.
FAQ
What company has Ryder System, Inc. (NYSE: R) acquired?
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