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Forward Air Corp. Buys Grand Haven’s Total Quality Inc. For $66M

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GREENEVILLE, Tenn. — Forward Air Corp. (Nasdaq:FWRD) Monday announced it has acquired Total Quality Inc., a Grand Haven-based provider of maximum security and temperature-controlled services to the pharmaceutical and life science industries.

TQI had 2012 revenues of approximately of $54.8 million. The purchase price was $66 million, approximately eight times TQI’s 2012 adjusted earnings before interest, taxes, depreciation and amortization, plus a possible earnings-based bonus of up to $5 million based upon TQI’s performance in 2013 and 2014. TQI was acquired on a cash free, debt free basis with an adjustment for working capital. The transaction will be funded by Forward Air’s cash reserves and is expected to be accretive to its 2013 earnings.

Founded in 1992, TQI uses industry-leading temperature-controlled equipment, 24-hour real-time monitoring and tracking technology, and layered security features and practices to provide its customers with a level of service that is unmatched in the industry today. In addition to its core pharmaceutical transportation services, TQI also provides truckload and less-than-truckload brokerage transportation services.

Terry Fewless, founder and President of TQI, said: “We feel that TQI and Forward Air are a great fit, as each company truly values providing best-in-class service levels to its customers. This is a necessary and logical next step for TQI. Forward Air will be able to provide us with the perfect mix of resources, structure and industry expertise necessary to capture our growth potential, while not sacrificing our customer commitment to provide high quality service.”

Added Bruce A. Campbell, chairman, president and CEO of Forward Air: “We are very excited about the acquisition of TQI. Our team has looked at a number of acquisition opportunities over the last few years only to have them eliminated from consideration due to core customer channel conflicts, high levels of asset intensity or inferior margins and returns. None of those hurdles exists with TQI. Not unlike our legacy airport-to-airport business, TQI has found a niche where they provide extremely high levels of service to their customer base that recognize this value driven proposition. This high level of service is a differentiator as well as a barrier to entry for other would be competitors.

Forward Air Corp. operates two business segments, Forward Air Inc. and Forward Air Solutions Inc.

Forward Air Inc. is a high-service-level contractor to the air cargo industry providing time-definite ground transportation services through a network of terminals located on or near major airports in 85 cities in the United States and Canada. It provides these services as a cost-effective alternative to air transportation of cargo that must be delivered at a specific time but is relatively less time-sensitive than traditional air freight or when air transportation is not economical.

Forward Air Solutions Inc. is a provider of pool distribution services. Pool distribution involves the consolidation and shipment of several smaller less-than-truckload shipments to a common area or region. Once at the regional destination, the loads are deconsolidated, then grouped with other shipments with common delivery points, and delivered in a very precise, time-sensitive manner. Our pool distribution network consists of terminals and service locations in 19 cities within the Mid-Atlantic, Southeast, Midwest and Southwest.

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