Mullen Group Ltd. Announces Strategic Acquisition of a U.S. Non-Asset Based Third Party Logistics Provider

OKOTOKS, AB, June 30, 2021 /PRNewswire/ - (TSX: MTL)  Mullen Group Ltd. ("Mullen Group", "We", "Our" and/or the "Corporation") is pleased to announce that it has signed a definitive agreement and closed the acquisition of QuadExpress ("QuadExpress"), the non asset based third party logistics provider business of Quad/Graphics, Inc. ("QUAD") (NYSE: QUAD) for $40.0 million USD on a cash free, debt free basis before working capital adjustments. 

"Today's announcement is significant to our organization for several reasons with the most important being that we just opened the door to future opportunities.  We already have an extensive network in Canada and will continue to invest where we find great companies to add to our service offerings. However, there are limits to just how much we can grow in the Canadian market.  The U.S. market, on the other hand, is a new market for our company, offering tremendous opportunity.  There is no doubt the U.S. market is key to the North American supply chain and we need to be there.  With this acquisition we gain immediate access to one of the largest markets in the world," commented Mr. Murray K. Mullen, Chairman and Chief Executive Officer.

QuadExpress, headquartered in Naperville, Illinois, is a global, technology enabled, non-asset based 3PL service provider focused on freight brokerage services across multiple modes of transportation. As part of the acquisition, Mullen Group acquired SilverExpress, the proprietary transportation management system technology platform that QuadExpress uses to align customer shipments with transportation carriers. In addition, the parties entered into: 1) a Transition Services Agreement in which QUAD will work with Mullen Group to facilitate the seamless transition of all business matters over the next 90-days; and 2) a Continuing Transportation Services Agreement whereby QUAD will continue to use QuadExpress for certain of its 3PL needs for a period of 24-months.

"I would like to thank the senior leadership team at QUAD for engaging with our company on this transaction.  Early on in the negotiating we both identified that our respective companies were based upon similar principles and values, the most important being that the acquisition would be seamless to everyone as well as beneficial to the people currently managing and overseeing QuadExpress.  This was important not just to QUAD, it was fundamental to the transaction.  During due diligence I had the opportunity to meet the senior leadership team at QuadExpress, which quite simply reinforced my interest in consummating this deal.  In fact, the entire senior team – Pat Malone, Dan Hall, Patrick Billie, Erich Fichtner, and Stephen Schnell will continue to manage, oversee and grow the business.  And they will be bringing along their entire teams, the best way to ensure a continuity of service to all customers," added Mr. Mullen.

QuadExpress provides 3PL service to a diverse group of 1,700 North American customers utilizing over 6,000 transportation companies.  In 2020, QuadExpress generated annual gross revenue of approximately $135.0 million USD with operating margins consistent with the North American 3PL sector.

"The QuadExpress business model is precisely the opportunity we have been looking for.  They are a 3PL service provider utilizing SilverExpress, a proprietary customer interface technology built 'by a shipper for shippers'.  Revenues are generated from providing a combination of traditional 3PL service offerings to customers and from partnering with agents, who have customer relations and utilize the SilverExpress platform to manage their business.  This unique business model will allow us to focus on investing in the technology platform, ensuring the business can meet the ever increasing demands associated with the emergence of digital integration.  The agents get access to a world class technology platform allowing them to focus on the customer relationship.  And the last piece of the puzzle is the carrier network.  QuadExpress has over 6,000 providers which will only grow and expand with our involvement.  I believe this is a scalable business model and is a great investment opportunity," said Mr. Mullen.

Exclusive Advisor

Mesirow Financial, Inc. served as the exclusive financial advisor to QUAD on this transaction.

Transaction Announcement Conference Call

Mullen Group has scheduled a conference call and webcast as follows:

A reply of the call will be available approximately two hours after the completion of the call until Wednesday, July 14, 2021, by dialing 1-800-319-6413 or 604-638-9010, access code 7284 followed by the pound sign.

About Mullen Group Ltd.

Mullen Group is one of Canada's largest logistics providers.  Our network of independently operated businesses provide a wide range of service offerings including less-than-truckload, truckload, warehousing, logistics, transload, oversized and specialized hauling transportation.  In addition, we provide a diverse set of specialized services related to the energy, mining, forestry and construction industries in western Canada, including water management, fluid hauling and environmental reclamation.  The corporate office provides the capital and financial expertise, legal support, technology and systems support, shared services and strategic planning to its independent businesses.

Mullen Group is a publicly traded corporation listed on the Toronto Stock Exchange under the symbol "MTL".  Additional information is available on our website at www.mullen-group.com or on SEDAR at www.sedar.com.

Contact Information:

Mr. Murray K. Mullen - Chairman of the Board, Chief Executive Officer and President
Mr. P. Stephen Clark - Chief Financial Officer
Mr. Richard J. Maloney - Senior Vice President
Ms. Joanna K. Scott - Corporate Secretary & Vice President, Corporate Services

121A - 31 Southridge Drive
Okotoks, Alberta, Canada  T1S 2N3
Telephone:  403-995-5200
Fax:  403-995-5296

Disclaimer

This news release contains forward-looking information within the meaning of applicable securities legislation relating to the acquisition of QuadExpress.  Forward-looking information in this news release is identified by the words "will", "anticipates" and "expects" and includes suggestions of future outcomes, including about the future expansion of our business in eastern Canada;  synergies that may be achieved across our network; annualized revenue and operating income before depreciation and amortization that may be realized by us from the acquisition of QuadExpress; and the importance of logistics and technology services in the United States.

Developing forward-looking information involves reliance on a number of assumptions and consideration of certain risks and uncertainties, some of which are specific to Mullen Group and others that apply to the industry generally. The risks and uncertainties that could cause our actual results to differ materially from the forward looking information contained in this news release include, but are not limited to: risks associated with the trucking/logistics business; risks associated with technology platforms; risks applicable to the overall economy; business and consumer trends and demand for goods and services; our ability to integrate and realize synergies from QuadExpress; and risks relating to current and future adverse impacts of the novel coronavirus pandemic.  Additional risks and uncertainties applicable to our business may be obtained in our annual management discussion and analysis for the fiscal year ended December 31, 2020 and our annual information form for the year ended December 31, 2020, both of which are filed on our profile at www.sedar.com.

The forward-looking information is based on certain assumptions made by us in light of our experience and perception of current and historical conditions.  Although Mullen Group believes that the forward-looking information contained in this news release is reasonable, there can be no assurance that such expectations will prove to be correct.  Readers are cautioned not to place undue reliance on forward-looking information as actual results may differ materially from those expressed or implied. 

The forward-looking information contained herein is made as of the date of this news release and Mullen Group disclaims any intent or obligation to update publicly any such forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

SOURCE Mullen Group Ltd.

Related Links

www.mullen-group.com