Penske Truck Leasing expands network, acquires New England truck leasing business

Reading-based Penske Truck Leasing announced Thursday it has reached an agreement to acquire Kris-Way Truck Leasing Inc.

Financial terms were not disclosed.

Founded in 1978, Kris-Way is a transportation services company offering full-service leasing, commercial truck rental, contract maintenance and dedicated contract carriage.

Penske will absorb Kris-Way’s approximately 150 associates and over 900 vehicles from seven locations throughout Maine and New Hampshire.

The transaction – anticipated to close in the second quarter of this year – is subject to regulatory approvals and other customary closing conditions.

“Kris-Way has earned a stellar reputation in the marketplace,” Art Vallely, president of Penske Truck Leasing, said in a release. “Penske and Kris-Way customers will benefit from the combined services both companies have to offer across our growing network. We look forward to working closely with Kris-Way customers and associates to integrate the business into the Penske brand.”

“We are excited to join Penske,” added Kris-Way President Tom Keefer. “We believe as part of Penske, Kris-Way is well-positioned to support our customers’ needs into the future. By expanding our network, our associates will have new opportunities for growth and development.”

Penske Truck Leasing is a Penske Transportation Solutions company that operates and maintains more than 416,000 vehicles and serves customers from more than 919 maintenance facilities and more than 2,500 rental locations across North America.

Paula Wolf is a freelance writer

Peoples Security plans to open bank in Doylestown this spring

The interior of the Peoples Security Bank & Trust Co. location that opened in Bethlehem Township several years ago. The bank is now entering the Doylestown market. (File photo) –

Scranton-based Peoples Security Bank & Trust Co. broke into the Lehigh Valley market when it opened its first branch in Bethlehem in 2014 and now, it’s eyeing an expansion into the Doylestown market.

Craig Best, president and CEO of Peoples Security Bank & Trust, said the new branch could open in mid-May if it receives approvals from the state and the Federal Deposit Insurance Corp.

“Once that’s done, we will execute the lease,” Best said. “We have some minor renovations we want to do.”

The new branch will be a full-service branch, with two-thirds of the lenders already hired, Best said. The lenders are working out of the King of Prussia office until the Doylestown office is up and running.

The new branch will offer deposit services and have six employees, with a business model that’s heavily targeted on commercial activity, he said. The Doylestown branch will be similar to the King of Prussia office and Lebanon County office, which primarily focus on commercial activity, he said.

He said the bank chose to enter the Doylestown market for several reasons.

“The number one reason is the talent we were able to recruit,” Best said. “We always try to focus on that first. We always try to focus on areas of good growth.”

Then, Peoples Security looks for the opportunity to work in the market with people who have vast experience, he added. As an example, two of the lenders the bank hired for the Doylestown branch have 30 years of banking experience.

Peoples Security also chose Doylestown because there has been some recent disruption in the market, with some merger and acquisition activity.

“We hope that frees up some customers, particularly those who have dealt with our lenders in the past,” Best said.

With the opening of the Doylestown branch at 325 S. Main St., Peoples Security will have 29 branches.

At the end of 2019, the bank had $2.4 billion in assets, he added.


Penn Community Bank to sell its insurance division

Perkasie-based Penn Community Bank has agreed to sell its insurance division, Penn Community Insurance, to Franconia Insurance & Financial Services, an agency in Telford. (Submitted) –

Perkasie-based Penn Community Bank has agreed to sell its insurance division, Penn Community Insurance, to Franconia Insurance & Financial Services, an agency in Telford.

The sale, planned to go into effect in the first quarter, would mean all Penn Community Insurance customers would become customers of FIFS LLC.

“We’ve been familiar with their business for many years,” said Chad Yoder, partner at FIFS. “We are only a half-mile from the Bucks County line so our territories significantly overlap.”

Many FIFS employees have close ties to the area, he added.

While there’s no firm date for finalizing the sale, Yoder said both parties signed the agreement and it would be final sometime in the first quarter.

FIFS has 17 full-time employees and plans to add more to its workforce once the sale is complete, he said.

“It gives us the capacity to not only write the standard insurance policies but niches,” Yoder said. These included aviation, motorsports and policies for business owners.

As a full-service agency, FIFS also offers life and health benefits insurance.

Penn Community Insurance has been a good partner throughout the process, he added.

He declined to disclose the financial terms of the agreement.

“We have had this insurance subsidiary for quite some time and we are looking for an opportunity to continue this,” said Jeane Vidoni, president and CEO of Penn Community Bank. “Our intent really when we thought to do this was to find a buyer that was committed to our culture. They’re focused solely on the insurance business.”

In the search for a buyer, Penn Community said it sought a local agency that shared its values.

Penn Community Bank has nine employees in its insurance division, said Charles Field, CFO of Penn Community Bank. Franconia Insurance will be having conversations with those employees to determine who is coming over, Field said.

“The insurance was definitely an important part of our business but it was a small one,” Vidoni said.

Penn Community Bank has more than $2 billion in assets, employs more than 350 people and offers services at 24 bank branches and two administrative centers throughout Bucks and Montgomery counties.

“As part of our strategic planning we made the decision that going out to find a partner was in the best interest of our customers,” Field said.



Before selling the business, bring financial order

Before selling your company, you have to ensure that the financial side of your business will be ready for analysis by prospective buyers. If you are not in a distressed situation or turnaround mode, and have time – ideally one to three years – prior to starting down the path with a buyer, a mergers and acquisitions specialist can help focus on the following key themes to get the financial side of your business ready for sale.

1. There is no requirement to obtain audited financial statements to sell your business. If you do have audited financial statements it will make the financial aspects of the transaction easier. If you are a larger company – $3 million or more of “adjusted” earnings before interest, taxes, depreciation and amortization, or EBITDA – many financial and strategic buyers may require it to complete a transaction. We often see a seller auditing the most recent completed fiscal year to satisfy the buyer. If you are contemplating a sale, it is not necessary to go back to the beginning of time and audit your historical financial statements. That is a time-consuming, unnecessary scenario, unless there was a particular issue with your financial controls that would warrant that.

2. Take a look at who is running finance and accounting in your business. If you have an outside or internal person handling your financials – bookkeeper, CFO or controller – it is very important for the person in that role to understand your numbers and be able to speak to them. When questions come up from a prospective buyer – for example, why is this expense booked in this particular way or why was it categorized in QuickBooks here? – you want someone other than you, the owner/seller, able to answer that question. If you are a small company, you may not have a choice in the matter and you will be answering the questions. If you are a larger company, making sure that person is able to not only speak to the numbers but was involved in preparing them will help to assure that the numbers you are providing to the buyer prospect are real, legitimate and vetted by someone other than yourself. This person is absolutely critical in helping to get a deal done.

3. If there are any financial “skeletons in the closet” – not necessarily compliance-related – for example, there was fraud going on in the business at some point and, as a result, you had a lot of unexpected expenses related to it. The key is to identify what those “skeletons” are and determine how they impacted your financial statements. You want to have plenty of time to clean up those issues and also be able to explain them. It will come up. You won’t be able to hide anything. You want everything out in the open, as much as possible. If you have time, you can start getting the facts, story and numbers right as to what the effects were and how you fixed the problem.

4. Figure out your “personalized adjusted” EBITDA and determine what would be accurate expenses to apply to your earnings. Many owners may run personal expenses through the company – meals, entertainment and travel – some of these expenses may not have anything to do with the business. Assess those expenses to see if they can be viewed as an adjustment to help show higher profitability. Those expenses would go away after a sale. Another example of a potential adjustment would be the extreme weather events we have been having over the years. For example, you may have been impacted by a hurricane leaving water damage. This would be something expensed through the income statement that isn’t happening every year. If those expenses ran through the income statement there could be a potential adjustment. Getting all the data and records to support those adjustments is critical. The buyer isn’t going to take it on face value that you had this expense. The buyer is going to want to see you had and paid the expenses, using AMEX or invoices showing actual expenses that ran through the business.

5. Look at “profitability by client” to assess who is driving your margins month over month, and quarter over quarter. Develop a way to track profitability by client or stream of business. This is no easy task. There is no packaged financial model you can use to pull it together. Every company has different cost structures and ways of managing how they deal with clients, specifically contingency or fee-for-services clients. Being able to have that model in place prior to sale will help to figure out any issues you may have. You may have significant concentration with one or two clients who make up a bulk of revenue and profit. You may have significant concentration with one or two clients who make up a bulk of revenue and profit. You can begin to make a plan to diversify to help lower your concentration risk for that buyer, which means the buyer may pay you a higher multiple or valuation if the concentration isn’t as significant. Working with companies to assess profitability by client not only helps determine deal structure but can help sellers determine if they want to keep, terminate or change staffing levels with a client.

How long does it take?

Some companies have all their financial controls in place. They don’t need to wait three years to go to market. But some companies have a QuickBooks file with many issues as to how they managed the numbers. As a result, being able to quickly pull together all the information needed to have a conversation with the buyer can take a long time for some companies.

You don’t want to share numbers that aren’t accurate. If you start rushing you could make errors in sending out information to the buyer. The numbers are critical to figuring out whether you can value or structure a deal that works for you and the buyer. You don’t want to have many mistakes out of the gate. The more time you have, the better off you will be.

Do you need help?

Most companies are able to assemble key information. Assembling it is one thing, but figuring out how to analyze it and go through what is there to identify issues is more complicated. This is why having an M&A adviser or anyone else who really knows the financial or accounting side of the process is important.

The preparation you take when it comes to your financials in advance of a sale will help lead to a positive outcome to you as an owner. It will also lead to a more efficient sales process.

Michael Lamm is a managing partner at Corporate Advisory Solutions, a boutique merchant bank headquartered in Philadelphia and serving Lehigh Valley businesses. He can be reached at [email protected]advisorysolutions.com or 202-904-7192.