Matt Bohn, a senior consultant with Shipware, said it will be business as usual for now with other regional carriers like LSO, Speedy and Pitt Ohio, but market pressure is sure to follow. MOODYS CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODYS CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. 1.9 Days. Recent increases in volumes have improved operating leverage, but sustainability of network efficiencies at high volume and higher earnings margin have yet to be demonstrated.LaserShip's business model utilizes independent contractors for deliveries that provides a cost advantage to offer lower rates to customers for smaller, low-priced packages compared to traditional large network competitors. Having real competition nationally can potentially reign the runaway price increases weve seen over the past couple of years, he said. The efficiencies generated by these routes are effectively passed on to the shipper, which explains why the regionals price-service proposition can be appealing, she said. window.googletag = window.googletag || {cmd: []}; By joining with LaserShip, we will be well positioned to continue innovating and providing leading service for shippers, and faster delivery for consumers. MOODYS CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. [email protected], For American Securities: About Greenbriar Equity Group American Securities and Greenbriar, which own LaserShip, will provide additional equity financing for the deal and continue to provide strategic support for the combined company. He is currently Chairman of the Board of FleetPride, LaserShip / OnTrac, and MW Industries, and a Director of Trace3. Rob Martinez, founder and co-CEO of consultancy Shipware LLC, said he was surprised by the announcement. HERE http://www.workssilver.com. 2023 American Securities. Loaded & Rolling (Enterprise Fleet News/Analysis). It looks like a 12x-15x price they paid for OnTrac, but if they can take advantage of this hot parcel market and future growth, this could be a great acquisition, Erickson said. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Our focus is always on the long-term best interests of the companies and investors we serve. However, the ace in the hole for the big boys is their customers fears of losing volume discounts should they shift even some of their business. }); googletag.cmd.push(function() { Acquisition activity may be muted over the course of 2021 as LaserShip delivers volume growth through its existing network, but the company could look to expand geographically through acquisitions.The stable outlook reflects Moody's expectation for LaserShip to generate earnings growth on substantially higher delivery revenues to maintain debt/EBITDA below 6.5x and generate positive free cash flow.The B2 rating on the first lien senior secured credit facilities, one notch above the company's B3 CFR, takes into account this debt's priority position in the company's liability structure ahead of the second lien term loan, which provides first-loss absorption in the event of a default. 2 and 3 respectively.MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements. Questions about a news article you've read? MOODYS PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODYS ANALYTICS, INC. The LaserShip-OnTrac entity equals just 3% of FedExs and UPS combined volumes and only 1.5% of combined revenue, according to consultancy Shipware LLC. We hope to make the world a better place by giving back to the communities in which we live and work. "We are pleased to welcome Mark as CEO of LaserShip," said Will Manuel, Chairman of the Board of LaserShip and a Managing Director of American Securities. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment. . The OnTrac network provides companies an affordable way to speed up ground delivery so they can lower their shipping costs and delight their customers with world-class service. (FS) Private equity firms American Securities and Greenbriar-backed LaserShip, an e-commerce last-mile delivery services provider, agreed to merge with OnTrac Logistics, a logistics services provider, in a $1.3bn deal. In a statement, Will Manuel, chairman of the board and head of private equity fund American Securities, said he was grateful for Holifield's "valuable contributions" during an important . LaserShip Chief Commercial Officer Josh Dinneen told the Wall Street Journal that the combined companys 100+ sorting and delivery hubs in 30 states and the District of Columbia will get it closer to offering a coast-to-coast solution which doesnt exist outside UPS or FedEx.. This allowed the carriers to deliver more packages within specific time windows, and at attractive rates and fewer delivery surcharges. Moody's expects LaserShip to maintain adequate liquidity, with modest cash balances balanced by full availability under its upsized $125 million revolver. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 2021 Moodys Corporation, Moodys Investors Service, Inc., Moodys Analytics, Inc. and/or their licensors and affiliates (collectively, MOODYS). Copyright 2023, All Rights Reserved, FreightWaves, Inc, Duffy named to run LaserShip/OnTrac as Holifield steps down. He is currently Chairman of the Board of FleetPride, LaserShip / OnTrac, and MW Industries, and a Director of Trace3. And they added that this service will connect the companies East and West Coast delivery footprints, moving packages both way in three days. The company's integrated regional parcel network offers customers a unique solution for next day and two-day parcel service across more . googletag.enableServices(); Will Manuel, chairman of the LaserShip/OnTrac board and managing director of American Securities, said in a statement. Associate New York. Get the latest business insights from Dun & Bradstreet. Securities class action lawsuits are filed on behalf of a class of investors or a class of holders of a particular security. In 2018, Shipware surveyed shippers with a collective $2.5 billion in annual parcel spend. Nicole participates in the representation of private equity sponsors and their portfolio companies with respect to mergers, acquisitions and divestitures. }); googletag.cmd.push(function() { It will be the only pure-play national e-commerce solution in last-mile parcel delivery and will enhance customers ability to meet growing demand in the consumer delivery market. LaserShip, Inc., the largest regional e-commerce parcel carrier in the U.S. and leader in last-mile delivery operating primarily in the eastern United States, and OnTrac Logistics, Inc., a leading e-commerce parcel logistics company operating primarily in the western United States, announced today that they have entered into a definitive agreement to merge. Duffy succeeds Mark Holifield, who also steps down from the Vienna, Virginia-based companys board, effective immediately. Then check your email for more information on the investigation process. The ultimate objective is to build out a coast-to-coast delivery network to compete with the large national carriers. Lasership serves customers worldwide. Will Manuel joined American Securities in 2016. FedEx and UPS have far from perfected deliveries in this world, and therein lies the chance for the merged entity and for regional carriers to make inroads, he said. The deal is expected to close in Q4. Following their late 2021 announcement, in which Vienna, Va.-based LaserShip, the largest regional e-commerce parcel carrier and last-mile delivery services provider, and Chandler, Ariz.-based regional shipping services provider OnTrac, announced they had entered into a definitive agreement to merge, with LaserShip acquiring OnTrac for $1.3 billion, the companies last week stated they are . 2023 American Securities. We do our best to solve any issues and answer your questions in the shortest possible time frames but some delays are possible. googletag.pubads().enableSingleRequest(); American Securities and Greenbriar-backed LaserShip to merge with OnTrac Logistics in a $1.3bn deal. Satish Jindel, president of Shipmatrix, said the LaserShip/OnTrac deal proved there is money to be made in B2C delivery, running counter to the duopolys growing focus on shifting the mix toward more profitable B2B shipments. - We also assigned our 'B-' rating and '3' recovery rating to the company's proposed $675 million first-lien . MOODYS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. Will received a BA in Government from Connecticut College. About 26% said they increased their use of regional carriers in 2018, though nearly half said they would engage more frequently during 2019. 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