COMPETITION WATCH: Wheels Group buys MSM Transportation

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BOLTON, Ont. -- MSM Transportation has been purchased by Wheels Group in an $18.6-million deal expected to wrap up by the end of September.

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[Nawk]

Wow! *mind BLOWN*

 

[noproblembuddy]

If you ask me, $18.6 million sounds like a fire sale price for a company the size of MSM, especially considering they have an office in California. The valuation seems on the low side.

 

[Rob]

NPB,

Sound more like 6.2 mil per partner and retirement to me.

 

[bull958]

NPB,

Sound more like 6.2 mil per partner and retirement to me.

I'm in, where do I sign up.

 

[lowmiler88]

The 18.6 sounds about right 7 - 9% profit times 5 years. I guess Wheels wants to actually own some equipment.

 

[noproblembuddy]

I'm in, where do I sign up.

LOL! When put in those terms, that's pretty sweet. I was thinking more in terms of the accounts and cash flow they're acquiring, along with the real estate and equipment, but when I saw the EBITDA figure that was in Today's Trucking, now I understand why they sold. $3.3 million on $44 million, while still profit, still seems so low to me for some reason. Not so sure about the share part of the deal. Wheels is only hovering around $1.09 with a negative earnings per share and the last time they gave out dividends back was when the stock was around the $5-$6 mark. It used to be around $9 in 2004. The lowest it's been in a year is $0.81. It may go up, it may not. Just sounds so iffy when you consider a sudden stock price drop would really mean Wheels got the company for the $16 million in cash and the stock won't count so much.