As previously announced on February 12, 2013, Vitran signed an agreement to sell its Supply Chain Operation (SCO) business to Legacy Supply Chain for $97.0 million in cash proceeds, subject to working capital adjustments. The sale of the SCO business is expected to close by March 1, 2013, upon completion of the Legacy financing, and is subject to customary conditions for this type of transaction. Vitran intends to use a portion of the net proceeds from this transaction to fully reduce its outstanding debt under its senior revolving credit facility, and will have approximately $50.0 million of remaining cash on the balance sheet. The operating results of the segment have been recorded as a discontinued operation.
"This marks a new beginning for Vitran Corporation as a pure LTL company. With the pending sale of our SCO business, expected to close March 1, 2013, Vitran will continue to focus on building a premier North American LTL company," stated Vitran President and Chief Executive Officer Rick Gaetz.
"We are very pleased with the progress being made in U.S. LTL by the new management team, with additional key members joining Vitran part-way through the third quarter. Unfortunately, this progress is not yet reflected in the operating results. However, our service product to our customer is greatly improved, we are achieving efficiencies throughout the operations and our commercial effort is organized and targeted. The use of our new technology continues to be optimized helping to drive all our efforts to improve results at U.S. LTL.
"Our mission in 2013 is clear: to create earnings momentum in U.S. LTL, by delivering a solid service product to our customers, thereby allowing us to grow density, revenue and yield. Canadian LTL will continue its commercial momentum built on a nicely profitable 2012 and we will focus efforts on our trans-border product offering which sets Vitran apart in the market place. Finally, I would like to thank all of our employees for their hard work and dedication and look forward to a significantly improved 2013," concluded Mr. Gaetz.