Operations

Houston Operations Merge To Form Big Regional Service

Posted on January 6, 2017 by - Also by this author - About the author

Avanti Transportation owner Erich Reindl (LCT 2015 file photo)
Avanti Transportation owner Erich Reindl (LCT 2015 file photo)
HOUSTON — Avanti Transportation and A Ambassador Transportation closed a deal Dec. 30, 2016 to form a combined company as of Jan. 1 that will expand its reach into more diverse client markets while creating one of the largest limousine vehicle fleets in America’s fourth largest city.

Exact terms of the deal were not disclosed, but the merger combines the company fleets to about 135 vehicles generating estimated annual revenues of $15 million for 2017.

Avanti Transportation owner and founder Erich Reindl will serve as President and CEO. A Ambassador owner Mike Hajek will serve in an as yet-to-be-titled role. Hajek could not immediately be reached for comment. The confidential merger agreement does not allow for public disclosure of primary ownership equity stakes in the new operation.

The non-brokered deal is a straightforward asset merger negotiated during fourth quarter 2016 by Reindl, Hajek, and their respective chief financial officers, Reindl told LCT. Avanti and A Ambassador will continue operating under their respective brands, websites, and phone numbers for the next few months, but all operations will be based out of Avanti’s headquarters and facilities.

Avanti, founded in 1996, ran a fleet of 40 vehicles, while A Ambassador, founded in the late 1990s, had 110 vehicles. Post-merger, the companies are shedding about 15 older or duplicate vehicles for a combined fleet of about 135 that includes all types of chauffeured fleet vehicles, from sedans to motorcoaches. Of the total, about 35 vehicles are minibuses and motorcoaches. The company plans to acquire Lincoln Continental sedans in the next few months to complement its sedan fleet consisting mostly of of Cadillac XTS, Lincoln MKS, and Mercedes-Benz BlueTec models.

The merger will not result in any layoffs, with the combined company retaining about 165-175 employees. That includes about 120 full-time chauffeurs and drivers; 20-25 part time ones; 20 office staffers; and a crew of six maintenance workers.

“We will have meaningful efficiencies going forward,” said Reindl, who also serves as a board director for the National Limousine Associaton. “They have business we don’t have, and we have business they don’t have, so it all complements very well. This creates one of the largest ground transportation services in Texas.”

Avanti Transportation brings a long, established roster of corporate business and contracts, affiliate work, and cargo airline contracts to the merger. Its clients span the oil and gas, financial, entertainment, and hotel/hospitality industries.

In addition to chauffeured corporate business, A Ambassador has a school bus division, airline-related route contracts, and contracts to serve oil and gas industry clients in New Orleans and Lafayette, La.

Neither company serves the retail/leisure limousine markets, preferring a full corporate, business, and contract focus, Reindl said.

The merger deal evolved during the past year out of a longtime working relationship between the two companies, although not as close local affiliates. A third party mentioned the two owners to each other as possible partners which started the exploratory process, Reindl said. The mutual familiarity helped ease the discussions.

Both companies also faced the realities of changes in the Houston marketplace, Reindl said. “The last few years have not been the most fun years for our industry. Times are changing rapidly and companies have to adapt one way or another. At the current industry situation, how our industry looks in terms of TNCs and low oil prices is not very promising. It dawned on me about a year ago that bigger is better.”

A larger company can be more competitive by attracting more business and streamlining overhead, Reindl said. “You have many more resources available. The efficiencies of one office gives us a competitive advantage compared to smaller companies because we can have savings in maintenance, personnel, and all other areas. At end of day, it’s quite a bit of money which can be put to work to create more business and more staff.”

After three to six months of integration, Avanti-A Ambassador will look to grow in other cities and possibly other states as well as pursue more international business in Houston. “We’re not interested in opening new office locations and starting from scratch, but would like to acquire existing companies and build on that foundation,” Reindl said.

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