04:19 PM EST, 12/02/2024 (MT Newswires) -- (Adding National Bank commentary in fourth paragraph)

Mullen Group ( MLLGF ) , trading just shy of 52 week highs said Monday it agreed to acquire Pacific Northwest Investments, including its subsidiary Pacific Northwest Moving, a less-than-truckload (LTL) carrier, for an undisclosed price.

The trucking and logistics company said the acquisition, which closed on Dec. 1, includes two owned terminals and is expected to generate annual revenues of over $25 million, with returns consistent with Mullen Group's ( MLLGF ) other business units, the company said. The acquisition was funded from existing cash and will operate within Mullen Group's ( MLLGF ) LTL segment.

Pacific Northwest Moving has a 50-year history of servicing customers in the Yukon Territory and Alberta. "This acquisition is important to our organization from a strategic perspective as we continue to invest in regional LTL opportunities. Acquiring regional carriers with strong ties to the communities they serve is an important element of our business model," said Senior Executive Officer Murray Mullen.

National Bank cited two key takeaways from the news, the first being that the deal is "not overly material, but consistent with management's acquisition strategy". The other is that there is "still room for more M&A". While no deal terms were disclosed, National anticipates Mullen paid near $25-$30 million for the acquisition. It recalled that at the end of Q3, the company had $130 million in cash and $525 million in unused credit, so there is still room for additional M&A, and the bank expects the company will be active on additional tuck-ins throughout 2025. The bank also notes that management has previously indicated that it would consider a platform LTL acquisition that would expand its network eastward.

National maintains an Outperform and $18.00 target on Mullen Group ( MLLGF ) shares following the acquisition. It said Mullen's financial results this year have been "solid in the context of weak underlying freight end markets, largely outperforming most other North American trucking companies". It noted management has indicated that M&A will be a clear focus in 2025, so the bank expects the company to continue to be active in the coming quarters, especially on additional tuck-ins within the LTL space.

Mullen shares closed up $0.25 to $15.71 on the Toronto Stock Exchange, shy of a 52 week high $15.78.