California company acquires Joplin-based CFI for $750M

Con-Way is a publicly-traded freight transportation and logistics company that’s been in business for more than 70 years. It has contracted with CFI for the past eight years.

“We feel like we’ve been dating for eight years,” said Bruce Stockton, vice president of maintenance for CFI. “We announced our engagement, and we’ll be getting married at the end of August.”

CFI President and CEO Herb Schmidt said in a July 17 conference call with analysts that Con-Way has been CFI’s largest customer, accounting for 6 percent of its total revenue. Schmidt said other companies who contract with CFI each represent less than 1 percent of total revenues. CFI generates about 40 percent of its revenue from business in and out of Mexico, Schmidt said, while Con-Way has ventured into the worldwide market.

That global business has created a $4.2 billion company, according to Tom Nightingale, Con-Way’s vice president of marketing. Con-Way produced $427 million for CFI in 2006, according to Doug Stotler, Con-Way president and CEO.

CFI has 2,600 trucks in service, while Con-Way operates 250. Nightingale said that Con-Way’s trucks will be folded into CFI’s division, creating immediate driver and support positions in Joplin and other hubs across the country.

CFI has four terminals outside of Joplin – Laredo and Lancaster, Texas; West Memphis, Ark.; and Taylor, Mich. – while Con-Way has 470 operating locations across the country, 360 of which are “brick-and-mortar” buildings and the rest mere drop lots.

“We have a large, large footprint,” Con-Way’s Nightingale said. “We’ve been looking to expand for quite a while. There were a lot of frogs in the pond, but only one prince that rose out of that pond. There were many trucking companies that we could have chosen from, but it was clear to us that CFI was the one that we wanted to bring to the dance.”

CFI has been a privately-held company to this point – primary shareholders include Richard P. Griot, Richard L Griot and Elizabeth Peterson – with more than 3,000 employees.

The merger creates a three-pronged company for Con-Way: less-than-truckload, truckload and supply chain management. Stotler said the companies’ combined truckload operations should generate as much as $500 million in revenue.

Con-Way shares (NYSE: CNW) closed July 18 at $56.50, compared to a 52-week range of $42.09 to $57.48. Second-quarter net income fell 32 percent to $48.1 million or 99 cents a share, compared to $70.7 million or $1.40 a share a year earlier.

Chris Roberts is a reporter for Joplin Tri-State Business, SBJ’s sister publication. See JTB’s July 30 issue for more on this story.[[In-content Ad]]