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Warehouse Services Inc., known as WSI, has acquired El Paso, Texas-based Sky Transportation Services as it aims to expand its cross-border transportation services with Mexico.
The woman-owned 3PL with corporate headquarters in Piedmont, South Carolina, announced last month that it had completed the deal, which is “expected to add over $60 million in annual revenue to WSI in 2023,” according to a press release.
Albert Luna, CEO and founder of Sky Transportation Services, remains in his leadership role and the brand will remain, according to the company.
Trucking Dive spoke with WSI Chief Operating Officer Steve Magruder on Friday about the deal, which involved Sky Trans Group Holdings. The 3PL executive explained what’s changing for the company and what’s next.
Editor’s Note: This interview has been edited for brevity and clarity.
Trucking Dive: How many trucks and drivers did you add to the deal?
Magruder of Warehouse Services Inc: We should have about 700 units of power across all our transport operations, including Sky, [adding] about 150 drivers.
TD: How significant an impact, if any, has the rise in cross-border freight traffic had on acquisition?
WSI: It was a strategic goal for us to expand this service offering. We’re working with some Mexican companies today to do some cross-border action, but it’s quite small in scale compared to what Sky is doing. So that definitely enhanced that ability of ours with the many partners that they work with. This was definitely a strategic improvement we were trying to achieve.
TD: What has your footprint been like in Mexico in the cross-border past?
WSI: Small enough. We have a fairly large fleet of bulk tankers. And we were taking some bulk tankers to some of the manufacturers down there, serving them with dry plastic pellet products. But as part of our business, it was pretty small. It was a little more ad hoc as our clients needed that kind of service.
TD: Is the whole aspect of nearshoring something that factors into this?
WSI: It was a piece of it. We have existing customers that have manufacturing facilities in Mexico. A bigger piece for us was, “How do we expand our service offerings to these customers?” But certainly as a sidebar, we certainly see that [nearshoring] as a movement we would like to be able to take advantage of.
TD: When was WSI’s last acquisition and what factors are most important in these types of deals?
WSI: Our last acquisition prior to this was in the fourth quarter of ’21. This company was a bit more diverse where they did some dedicated transport, public warehouses, dedicated warehouses. they had a brokerage business and had an in-house IT software team out of Minneapolis.
And one of the things we look for is really well-run companies. We are not recovery experts. We’re looking for companies that have talent, have a fairly long, you know, successful history, that … maybe have service offerings that we don’t have or geographic locations that we’re not currently in. And then our culture suits us very well. We are a family company, we have been around for 37 years and we want similar values in the companies we want to acquire.
TD: Does the company plan to make another acquisition or acquisitions in the next year?
WSI: We have some goals. I mean, we’re still hooked. Nothing about an LOI or IOI situation, just more preliminary discussions. But we’re still looking for opportunities out there.