In 2022, the company spent $100 million to build a sortation hub in Philadelphia and to expand facilities in Columbus, Ohio; Charlotte, North Carolina; and Nashville, Tennessee. Maintaining positive free cash flow generation with free cash flow-to-debt in the high single-digits range could also result in an upgrade.The ratings could be downgraded if LaserShip loses a major customer or there is rapid turnover of the customer base, especially among the newer customers, inability to increase contribution margin per package at higher volumes, increased competition that strains revenue per package, or higher delivery costs. Nicole Chen. LaserShip is the leader in last-mile delivery for retailers and shippers that desire reduced transit times, lower costs, reliable on-time performance, and increased flexibility within their supply chain. The ultimate objective is to build out a coast-to-coast delivery network to compete with the large national carriers. There is no explicit protective language limiting such releases.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSThe ratings could be upgraded if LaserShip demonstrates improving and sustainable operating leverage as delivery volumes increase, such that EBITDA margins are maintained in at least the mid-teens range and debt/EBITDA decreases toward 5x. While some experts said the deal doesnt pose an immediate threat to the duopoly of UPS and FedEx on a national level, all agree its a wake-up call for them and a boon for shippers facing volume limits, cost spikes and service level challenges. At the same time, analysts sounded a note of caution in terms of the combined companys ability to maintain current service levels as it scales, as did Skiver. In a statement, Will Manuel, chairman of the board and head of private equity fund American Securities, said he was grateful for Holifields valuable contributions during an important juncture at the delivery company. LaserShip is a portfolio company of American Securities and Greenbriar, and both will provide additional equity financing and continued strategic support for the combined company. It continues to be such an . Get the latest business insights from Dun & Bradstreet. Further, any regulatory changes that negatively impact LaserShip's operating model could also lower the rating. When the merger was initially announced, LaserShip and OnTrac said they would form the only pure-play national e-commerce solution in last-mile parcel delivery and enhance customers ability to meet growing demand in the consumer delivery market. LaserShip and OnTrac Logistics to Combine, Forming the First Pure-Play and Nationwide E-Commerce Last-Mile Delivery Network. Questions about a news article you've read? "I . American Securities and its affiliates have more than $25 billion under management. Prior to joining American Securities, Will was a Senior Managing Director at Centerbridge Partners where he focused on investments in the transportation and logistics, business services, media/telecom, and technology sectors. @LaserShipAssist. About LaserShip, Inc. Specifically, Skiver added expansion into new markets like Dallas and Chicago could lead to profitable growth for LaserShip. 1912 Woodford Road. googletag.defineSlot('/21776187881/fw-responsive-main_content-slot2', [[468, 60], [728, 90], [300, 100], [320, 50]], 'div-gpt-ad-1665767472470-0').defineSizeMapping(gptSizeMaps.banner1).addService(googletag.pubads()); The goal of acquisition is to expand regional last-mile delivery to reach more customers. gptAdSlots.push(gptSlot); Will Manuel, an American Securities managing director who is also LaserShips chairman, has high aspirations for the entity in a delivery world turned upside down by the COVID-19 pandemic. googletag.enableServices(); We enjoy our work and the relationships that come from it. One of those is . Founded in 1999, Greenbriar is a private equity firm managing over $6 billion of total committed capital focused on investments in market-leading services and manufacturing businesses. googletag.pubads().collapseEmptyDivs(); About one-third said they used regionals because of their service, and they received no cost benefits over what they paid UPS and FedEx. One thing for sure, UPS and FedEx better wake up. SEE APPLICABLE MOODYS RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODYS CREDIT RATINGS. OnTrac was founded in 1991 and has become a top choice for e-commerce and companies looking to speed up parcel distribution without the additional costs associated with national carriers. 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. Founded in 1986, LaserShip has evolved into the leading provider of same-day and next-day delivery services in the Eastern and Midwest U.S. for premier e-commerce and product supply businesses, including five of the largest retailers in the U.S. For more information, visit LaserShip.com. Your email address will not be published. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Industrial Technology var gptSlot = googletag.defineSlot('/21776187881/FW-Responsive-Main_Content-Slot1', [[728, 90], [468, 60], [300, 100], [320, 50]], 'div-gpt-ad-b1-i-fw-ad-1').defineSizeMapping(gptSizeMaps.banner1).setCollapseEmptyDiv(true).addService(googletag.pubads()); Greenbriar is a specialist investor focused on growing market leading companies where we can partner with management to execute a specific value creation plan. Moody's expects LaserShip to generate positive free cash flow of about 3% of total adjusted debt in 2022. I predict more consolidation of regionals especially with the rate increase being slapped on shippers by UPS and FedEx this year. Moody's also assigned B2 ratings to the company's proposed first-lien credit facilities, consisting of a $75 million revolver expiring 2026 and a $675 million term loan due 2028, and a Caa2 rating . Based in New York with an office in Shanghai, American Securities is a leading U.S. private equity firm that invests in market-leading North American companies with annual revenues generally ranging from $200 million to $2 billion. Will received a BA in Government from Connecticut College. Diego Kantt is the current Principal at American Securities.Prior to this, they held Board Member positions at Phoenix Tower International, The Blackstone Group, Metrotel, Phoenix Tower do Brasil, and Neutral Duty Free Shop.. Diego has over 25 years of experience in the retail industry, with a focus on branded products and . 5614 Business Support Services. Strong growth is likely to continue over the next couple of years as consumers become accustomed to less than two-day delivery times for ecommerce purchases.. With OnTrac, we will use our combined best practices and scale to support customer growth and provide excellent opportunities for our associates., As our customers grow, so do their shipping needs, said Robert E. Humphrey, Jr., Chairman and CEO of OnTrac. http://www.greenbriarequity.com, For LaserShip: googletag.pubads().enableSingleRequest(); - The combined company will be a leading national network and solution for e-commerce retailers and other shipping customers. The survey found that 74% were not using regional carriers, and just 7% were engaged with them in a significant way. }); googletag.cmd.push(function() { Liked by Will Manuel. This will open an investigation for the package. 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. As the new CEO, Mr. Holifield will assume day-to-day leadership of the company effective November 8, 2021, and will succeed interim CEO Mike Roth, who will remain a Board member. For more information, visit ontrac.com. However, one of the sources said it's likely that they will be filled in some way and that a national network will emerge. LaserShip's $1.3-billion deal for OnTrac gives it delivery coverage on both U.S. coasts. We support existing CEOs and management teams throughout our partnership, resulting in low leadership turnover. By connecting our East and West Coast delivery footprints and launching our transcontinental service, LaserShip and OnTrac help retailers solve that problem, as we have evolved into a critical part of the e-commerce infrastructure, he said. - We assigned our 'B-' issuer credit rating to ASP LS Acquisition Corp. Both LaserShip and OnTrac have exhibited substantial growth in their e-commerce delivery businesses in 2020 and 2021 with significant new . }); Kelly Picard, CEO of Hackbarth Delivery Services Inc., a regional carrier based in Mobile, Alabama, agreed that even in aggregate the regionals are Lilliputians in the land of the twin giants. Prior to Centerbridge, Will was a Principal at Spectrum Equity Investors and Spire Capital Partners. In 2018, Shipware surveyed shippers with a collective $2.5 billion in annual parcel spend. Holifield formally assumed the role on Nov. 8, 2021. Its throwing the baby out with the bath water, Jindel said. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. No time frame for that has been specified. 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. aharsch@american-securities.com. In a note to investors, Moodys said the acquisition of OnTrac was a transformative step toward being a national player by combining east and west coast networks. Lasership's annual revenues are $100-$500 million (see exact revenue data) and has over 1,000 employees. At FleetPride, Duffy has overseen over 25 acquisitions. googletag.pubads().collapseEmptyDivs(); 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. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moodys Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading Investor Relations Corporate Governance Director and Shareholder Affiliation Policy.Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODYS affiliate, Moodys Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moodys Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). By continuing to access this document from within Australia, you represent to MOODYS that you are, or are accessing the document as a representative of, a wholesale client and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to retail clients within the meaning of section 761G of the Corporations Act 2001. LaserShip has acquired OnTrac Shipping on Oct 13, 2021. "If [LaserShip/OnTrac] doubled in volume . The combined company will bring together two complementary operating footprints across the United States. The deal is expected to close in Q4. We are also expanding to Texas in the first quarter of 2023 in the urban megaregion of Austin, Dallas, Houston and San Antonio to reach an additional 19 million consumers.. googletag.cmd.push(function() { Regional carrier LaserShip is acquiring competitor OnTrac in a $1.3 billion deal, in one fell swoop changing the equation in domestic last-mile parcel delivery by giving the combined entity coverage of three-quarters of the continental U.S. as ecommerce demand continues to soar. And they added that this service will connect the companies East and West Coast delivery footprints, moving packages both way in three days. Our new service fills that void and were excited to serve as a supportive, long-term partner for our customers, he said. The rating outlook is stable.Proceeds from the first and second lien term loans along with cash equity will be used to finance the purchase of a majority stake of LaserShip by the private equity firm American Securities LLC.The following rating actions were taken:Assignments:..Issuer: ASP LS Acquisition Corp.. Corporate Family Rating, Assigned B3. Probability of Default Rating, Assigned B3-PD.Senior Secured 1st Lien Revolving Credit Facility, Assigned B2 (LGD3).Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3).Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD5)Outlook Actions:..Issuer: ASP LS Acquisition Corp..Outlook, Assigned StableRATINGS RATIONALELaserShip's ratings reflect the company's modest scale in the highly competitive e-commerce residential delivery space, relatively limited track record operating at high delivery volumes and elevated financial leverage. This document is intended to be provided only to wholesale clients within the meaning of section 761G of the Corporations Act 2001. 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 is the leader in e-commerce last-mile delivery for retailers and shippers that desire reduced transit times and increased flexibility within their supply chain. Find company research, competitor information, contact details & financial data for UBS SECURITIES PTE. Associate New York. It does offer LaserShip flexibility to scale operations, dependent on its ability to attract and maintain independent contractors as volumes increase. For more information, visit american-securities.com. Vienna, Virginia-based LaserShips mid-October $1.3 billion purchase of Chandler, Arizona-based OnTrac will forge the first nationwide provider built from regional networks. LaserShip and OnTrac are expanding to Texas! By joining with LaserShip, we will be well positioned to continue innovating and providing leading service for shippers, and faster delivery for consumers. googletag.enableServices(); There are deep pockets behind the tie-up in the form of private equity firm American Securities LLC. Based in New York with an office in Shanghai, American Securities is a leading U.S. private equity firm that invests in market-leading North American companies with annual revenues generally . Moody's expects LaserShip to maintain adequate liquidity, with modest cash balances balanced by full availability under its upsized $125 million revolver. LaserShip is a portfolio company of American Securities and Greenbriar, and both will provide additional equity financing and continued strategic support for the combined company. The combined company will be a leading national network and solution for e-commerce retailers and other shipping customers. window.googletag = window.googletag || {cmd: []}; This decreases the value of a national, integrated network another reason LaserShip doesnt need immediate national coverage.. In terms of the competitive benefits the networks launch provides, Dinneen said it goes back to how retailers have had to balance consumer expectations of free and fast home delivery with rising delivery rates, surcharges, and capacity constraints that erode profitability and customer satisfaction. All Rights Reserved. 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. There are deep pockets behind the tie-up in the form of private equity firm American Securities LLC. Regional carriers, including LaserShip and OnTrac, are already at or near full capacity, and its uncertain at best how much of FedExs and UPS share they could take and still adequately service the accounts, Shipware said. For more information, visit ontrac.com. googletag.pubads().enableSingleRequest(); Rob Martinez, founder and co-CEO of consultancy Shipware LLC, said he was surprised by the announcement. About Greenbriar Equity Group Greenbriar looks to identify companies with proven management teams capitalizing on strong long-term growth prospects that can benefit from Greenbriar's deep sectoral expertise and strategic insight alongside our proven operating capabilities and network of senior executive relationships. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. 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