MIAMI - Ryder System, Inc. (NYSE: NYSE:R), a prominent player in supply chain, transportation, and fleet management solutions, announced today a definitive agreement to acquire Pit Stop Fleet Service. This move is aimed at expanding Ryder's mobile maintenance service, Torque by Ryder™, into 140 cities across 20 states, enhancing their retail offerings in fleet maintenance.
The acquisition, expected to be finalized by August 1, pending customary closing conditions, will see Ryder's Torque by Ryder™ business grow with an anticipated $24 million in gross revenue by 2025. While the financial specifics of the deal remain undisclosed, the transaction is projected to contribute incrementally to Ryder's earnings.
Pit Stop, established in Venice, Florida, provides mobile fleet maintenance services, including battery, tire, and transmission repairs, as well as preventative maintenance and breakdown assistance. Ryder plans to fully integrate Pit Stop's employees, assets, and operations, ensuring a seamless customer experience. The founders of Pit Stop, Ron and Connie Perry, will assist with the integration process.
Tom Havens, president of Fleet Management Solutions at Ryder, stated that the acquisition will leverage economies of scale and offer unmatched flexibility for fleets needing swift maintenance services. The expanded service footprint will cover states including Alabama, Arizona, Florida, and Texas, with additional states expected to join later in the year.
The deal will boost Torque by Ryder™'s workforce to approximately 200 technicians, providing a comprehensive range of vehicle services. This includes commercial trucks, trailers, delivery vans, refrigerated vehicles, and emergency response vehicles, among others.
John Croke, Vice President of Pit Stop, expressed confidence in Ryder's ability to uphold the company's legacy and provide growth opportunities for employees and reliable service for customers.
Ryder System, Inc., headquartered in Miami, is a fully integrated logistics and transportation company offering a broad suite of services in the United States, Mexico, and Canada. The company manages nearly 250,000 commercial vehicles and operates close to 300 warehouses.
The information for this article is based on a press release statement from Ryder System, Inc.
In other recent news, Ryder System, Inc. announced an increase in its quarterly cash dividend to $0.81 per share, marking a $0.10 rise from the previous dividend. This upcoming dividend represents the company's 192nd consecutive quarterly payment.
In financial developments, Ryder System reported increased earnings in the first quarter of 2024, bolstered by strategic acquisitions such as Cardinal Logistics and Impact Fulfillment Services. However, the company faced challenges in the used vehicle sales and rental market, leading to a revised full-year 2024 free cash flow forecast to negative $175 million to $275 million.
Analysts from Stephens and Morgan Stanley (NYSE:MS) provided their insights on Ryder System's performance. Stephens raised Ryder Systems' stock price target to $120, maintaining an Equal Weight rating, while Morgan Stanley set the stock at Overweight with a $165 target, citing the company's ongoing transformation. Nevertheless, both firms expressed caution due to uncertainties surrounding the used vehicle and rental market outcomes for the rest of the year.
Lastly, Ryder System is set to hold an Investor Day on June 13 in New York City.
InvestingPro Insights
As Ryder System, Inc. (NYSE: R) gears up to enhance its fleet maintenance services through the acquisition of Pit Stop Fleet Service, investors and stakeholders may find the following insights from InvestingPro valuable when assessing the company's financial health and future prospects.
InvestingPro Data metrics reveal that Ryder boasts a market capitalization of $5.64 billion, with a Price/Earnings (P/E) ratio of 16.45, reflecting investor sentiment on the company's earnings capacity. Notably, the company has demonstrated a revenue growth of 4.95% in Q1 2023, indicating a positive trajectory in sales performance. Additionally, Ryder's dividend yield stands at a solid 2.52%, showcasing its commitment to returning value to shareholders.
Two pertinent InvestingPro Tips for Ryder include the company's significant debt burden, which could impact its financial flexibility, and the aggressive share buyback strategy by management, signaling confidence in the company's valuation and future performance. These insights, coupled with the fact that Ryder has been profitable over the last twelve months, provide a nuanced view of the company's financial strategies and operational success.
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