Quality Distribution Q1 Profit Down; To Be Acquired Apax In $800 Mln Deal

(RTTNews) - Quality Distribution Inc. (QLTY), a North American logistics and transportation provider, reported that net income for the first quarter ended March 31, 2015 decreased to $2.5 million, or $0.09 per share, from $3.1 million or $0.11 per share in the previous year.

Adjusted net income increased to $5.1 million, or $0.18 per share, from $3.9 million, or $0.14 per share last year.

Total operating revenues declined to $230.45 million from $234.49 million last year.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per share and revenues of $243.13 million for the quarter. Analysts' estimates typically exclude special items.

Excluding fuel surcharges, revenue increased to $207.3 million or 2.8% compared to $201.7 million. This improvement was primarily due to the 2014 expansion efforts in Chemical Logistics, which drove increased volumes, along with strong growth in the Intermodal business, specifically depot services; these benefits were partially offset by adverse weather conditions and Energy Logistics' exit from certain underperforming shale regions.

Separately, Quality Distribution announced that it agreed to be acquired by funds advised by Apax Partners, a global private equity firm, for approximately $800 million, including the assumption of debt, or $16.00 per share in cash.

The transaction price represents a premium of approximately 63% over Quality Distribution's closing share price on May 6, 2015.

Quality Distribution believes that the transaction provides its shareholders with an attractive premium that delivers immediate compelling value for their shares.

The definitive agreement was unanimously approved by Quality Distribution's Board of Directors, which recommended that Quality Distribution's shareholders approve the agreement.

The acquisition is subject to customary closing conditions, including obtaining the approval of the holders of a majority of the total outstanding shares of Quality Distribution common stock and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

The transaction is expected to be completed in the third quarter of 2015. Under the terms of the agreement, Quality Distribution may solicit alternative proposals from third parties during a 40-day "go-shop" period following the date of execution of the definitive agreement.