Earlier this week, Dallas-based MODE Transportation, a non-asset 3PL offering truckload, less-than-truckload, intermodal, ocean, rail, air, and managed transportation services, said it has entered into a definitive merger agreement to acquire Jacksonville, Fla.-based SunteckTTS, a multimodal transportation solutions provider.
MODE officials said that as per the terms of the agreement both Mode and SunteckTTS will operate under the MODE name, adding that the combined company will facilitate more than 1.5 million annual customer shipments and generate more than $2 billion in revenue. And they added that the combined entity will provide shippers with various modal services, including truckload, less-than-truckload, rail intermodal, drayage, air, ocean and parcel freight. They also said that the company will continue to invest in technology and innovation best serve the agent, shipper, and carrier communities.
A purchase price was not disclosed, and the transaction is expected to be completed by the end of 2019.
MODE President and CEO Jim Damman will be the company’s CEO, with SunteckTTS CEO Ken Forster serving as president and COO, with the company adding that its leadership team will be comprised of senior executives coming from Mode and SunteckTTS.
“We are very excited to announce this transaction with SunteckTTS. Our two companies are built on a similar culture of outstanding customer service,” Damman said in a statement. “The addition of SunteckTTS’ robust agent, product and customer base further strengthens MODE’s broad diversity of service offerings, while continuing to position MODE as a premium provider of technology-driven logistics. This transaction represents an important milestone in MODE’s history. A year ago, we launched an initiative to identify strategic acquisition opportunities that would strengthen the Mode platform and enable us to continue to improve the best-in-class service and capabilities we provide to our customers. We look forward to welcoming SunteckTTS as we continue to execute on this strategy going forward.”
Forster was equally optimistic, saying that in today’s increasingly competitive logistics market, the importance of scale, service diversity, and technology cannot be overstated.
“The combination of MODE and SunteckTTS provides new and existing agents, shippers, and carrier partners a significantly enhanced platform positioned for the future,” he said.
In September 2018, MODE was sold by freight transportation services provider Hub Group to an affiliate of global private investment firm, York Capital, for roughly $238.5 million.
Hub Group acquired MODE in April 2011, when it acquired asset-light transportation company Exel Transportation Services (ETS), a subsidiary of Deutsche Post World Net, for $83 million. Hub subsequently re-named Exel as Mode Transportation.
Dick Armstrong, chairman of supply chain consultancy Armstrong & Associates, told LM that MODE’s acquisition of SunteckTTS is interesting on multiple fronts.
“Mode was always the weak sister for Hub,” he said. “Sundtck’s gross margin is ~ 18%, and MODE’s is ~ 12%. I would expect Sunteck personnel to exercise most day-to-day control. The core operational areas are complimentary: Suntech SE-North; Mode Texas based with a lot of intermodal.”
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