ATS exiting income trust game

TORONTO – Another Canadian carrier is about to shed its income-trust status.

Andlauer Management Group Inc. (AMG) announced today that it wants to buy back all the units of the Andlauer Income Fund ("ATS").

This means the company would once fall under the direct leadership of the man who founded the carrier in 1991, Michael Andlauer.

Before the transformation actually takes place, the board of directors of the ATS fund will consider the offer, so there’s a chance the move might not go through. But that’s unlikely.

This follows a similar but not identical move by the largest trucking income fund in Canada, TransForce, which in May completed its transformation from an Income Fund to a corporation.

ATS has since prefers to concentrate on its core assets
rather than buy fleets in bulk .

These moves have been predicted since the fall of 2006, at which time the Federal Government surprised the stock market by announcing that that income trusts, which previously operated under very distinct tax umbrellas, would be subject to the same corporate tax as public corporations.

Unlike most trucking-based income trusts such as TransForce, ATS hasn’t spent the last decade targeting small and medium-sized fleets for takeover.

Andlauer originally became an income trust to accelerate such growth, but, as Bob Brogan, senior executive vice president told Today’s Trucking in a recent profile of the company, ATS has since preferred to concentrate on its core assets.

Under the proposal AMG, which already owns about 25 percent of the units of the trust, would acquire the remainder of the units at a price of $11.75 per unit.

ATS’s units trade on the Toronto Stock Exchange under the symbol ATS.UN.

The specialty carrier, based out of Etobicoke, Ont., has about 100 power units and another 250 contracted owner-operators and 23 customized terminals across Canada.

It has been extremely successful even in a depressed market by offering proprietary transport solutions for a handful of high-value niche markets, such as pharmaceutics.