Ryder System Inc. (R) acquired truck lease, rental and maintenance fleet services from privately owned B.I.T. Leasing Inc. a Hayward, California-based company.
The acquisition took place in two phases. The first was completed in August 2010 and the second in March 2011.
The company acquired a fleet of approximately 364 full service lease, 121 rental and 72 contract maintenance vehicles serving approximately 131 contract customers in Rohnert Park, Hayward, San Jose and Watsonville. Ryder already began operations for BIT customers in Rohnert Park last December. It expects to serve the remaining areas over this year.
Ryder is expected to gain approximately $9 million in annualized operating revenue from the acquisition, which should be accretive to 2011 earnings. Furthermore, Ryder is looking forward to accelerated earnings in the coming years on higher productivity rising out of combined operations.
The acquisition will further enhance high levels of additional services like customized service solutions for BIT’s customers. Ryder will provide BIT’s customers with new resources and increased product offerings, including insurance and fuel, which will help them grow in the competitive marketplace.
Over the long term, Ryder plans to invest strategically in commercial rental vehicles, maintenance technology, rental fleets, sales, information technology initiatives and acquisitions. These investments are expected to propel revenue and earnings growth in future years. Additionally, a sound balance sheet would facilitate the company to expand its footprint through more acquisitions and gain more market share than competitors like Con-Way Inc. (CNW).
Currently, we maintain our long-term Outperform recommendation on Ryder supported by a Zacks #2 (Buy) Rank.
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