Q&A with Alain Bedard: May TransForce be with him

TORONTO, (Nov. 7, 2003) — Canadian trucking giant TransForce continued its drive down the acquisition trail in August when it bought Calgary-based Canadian Freightways at auction for $69.6 million and agreed to take on $15 million in debt. Canadian Freightways, sold as part of the liquidation of its bankrupt parent, Consolidated Freightways, is regarded as a well-run, profitable operation, just the kind of property TransForce likes to target. It also gives the Montreal-based company, strong in the East, a more solid presence in Western Canada’s LTL market.

We spoke with TransForce president and CEO Alain Bédard about the deal and what it means for his company.

TT: In March it looked like a group led by Canadian Freightways president Darshan Kailly would buy the company, but the deal didn’t work out. When did you first become interested in Canadian Freightways?

Bédard: We were approached by the investment broker after the original offer fell through.

TT: Why is this a nice fit for TransForce?

Bédard: Included in CF is a customs brokerage division (Milne & Craighead) that we
didn’t have before. There is also a logistics division (Universal Contract Logistics) that complements our own logistics operations. Above that, there are two LTL operations (Epic Express in Ontario and Click Express in the West) to help us with our density. We were covering Western Canada, but not intra-West, so CF gives us regional strength.

TT: You now have some overlap in logistics and parcel operations. Is there a plan to fold either the logistics part with TransForce or parcel with Canpar?

Bédard: Normally we don’t like to merge things. However, CF Parcel is very small so we’ll have to see what happens.

TT: At Canadian Freightways, you have a dynamic president in place. What sort of relationship do you have with Darshan Kailly?

Bédard: Darshan has been there a long time. He’s done a hell of a good job. Everybody over there has done a hell of a good job, considering the crisis (at parent CF).

TT: That’s your style isn’t it? You seem to be interested in well-managed, independent
companies where there’s little need for TransForce to rework from the ground up.

Bédard: Exactly. We have no plans to bring managers from TransForce (into Canadian Freightways). Never. What we do is benchmark everyone in his field. The presidents know exactly how they compare with each other. It’s up to them. We’re just there to make sure the show keeps going.

TT: From big-name carriers to small, niche businesses, TransForce has grown through acquisition in the last seven or eight years. Is there more consolidation on the way?

Bédard: I think the trucking industry is much too fragmented. So yes, there’s going to be more consolidation. Is it going to be about major players buying small companies? I think it’s going to be a mix. But there’s no doubt there has to be more equilibrium between supply and demand.

TT: Are you done buying companies for this year at least?

Bédard: Normally we don’t do more than one major deal a year. So no, I don’t think there’s going to be anything major in the next 12 months.