3PL News: Kenco acquires American Distribution Centers

CHATTANOOGA, Tenn. and SALT LAKE CITY??Third-party logistics (3PL) services provider Kenco Logistics Services LLC recently announced it has acquired American Distribution Centers (ADC). Financial terms of the deal were not disclosed.

Based in Salt Lake City, ADC focuses on public and contract warehousing and transportation and logistics services like warehousing parcel shipment, pooled distribution, and fulfillment, with roughly seventy percent of its clients in the food industry, according to its Web site. Its transportation network is comprised of more than 120 power units that support pooled retail deliveries for book, apparel, gift, and specialty chains in the Intermountain region of Idaho, Utah, Nevada, and Arizona, as well as portions of Oregon, New Mexico, Colorado, Wyoming, and Montana. ?   ADC has warehouse and cross dock facilities in Arizona, Colorado, Idaho, New Mexico, Texas and Utah, but manages transportation in the Intermountain region.  

In an interview with LM , Kenco President and COO Andy Smith said that ADC provides a service that Kenco did not currently offer and it did so in a region in which Kenco did not have a strong presence with the exception of Utah. He added that ADC??s current book of business gives Kenco access to several good customers.

Kenco has been evaluating companies for several years, explained Smith. There have been many times, he said, where the company has felt that the return was not strong enough, the culture would not fit or there were too many inherent risks involved.  But ADC??s culture was an ??instant fit and the risks associated with the purchase were quantifiable and we were therefore able to get comfortable with projected results,?? said Smith.

Smith also explained that the acquisition of ADC will be a boon for customers.

??This deal will offer our current customers new services that we have not offered in the past (retail delivery and USPS delivery), plus new locations in the Intermountain states,?? he said.  ??[And] leveraging the Kenco Management Services resources (Kenco??s shared services group) which will allow for additional focus on HR needs, safety management, training, quality management, engineering resources, IT services and financial controls.??

Prior to this acquisition, which closed on October 17, Kenco had more than 400 power units and 23 million of square feet already under management. And the addition of ADC??s rolling stock and Intermountain region facilities positions Kenco to serve the logistics needs of customers throughout the U.S. and Canada, said Gary Mayfield, Kenco chairman and CEO.

??ADC's business encompasses many of the fine traditional core strengths of Kenco, such as warehousing and distribution,?? said David J. Pettit, ADC President and CEO, in a statement. ??ADC is also very pleased to bring a strong tradition of service excellence for retail pool distribution for the apparel, book and specialty retail chains, pharmaceutical stores, and technical and delivery support for the small package shipping industry in our 9 state region.  With Kenco's reputation for delivering on client expectations, we expect this to be an ideal strategic move for both organizations."