Investors and analysts are reacting positively to Celadon Group Inc.’s decision to bring in an outside executive with years of transportation industry experience to run the company.
The struggling Indianapolis-based trucking firm announced Thursday afternoon that it had hired Paul C. Svindland to replace Paul Will, who will retire later this month after five years as chief executive.
Celadon’s stock price exploded Friday morning, jumping more than 25 percent, to $2.95 per share, on heavy volume.
Svindland is regarded as a turnaround expert who has helped numerous trucking companies.
Jeffrey Kauffman, an investment analyst for New York-based Aegis Capital Corp., called Svindland “impressive” and said he had a resume that indicates he is capable of leading the company’s turnaround. Kauffman kept a “buy” rating and a $12 price target on the stock.
Svindland, 45, is chairman and CEO of Randolph, New Jersey-based Farren International Holdings Inc., a private equity-backed holding company for multiple trucking companies that he joined in 2014. He previously was CEO of EZE Trucking Holdings Inc., chief operating officer at Pacer International, and managing director of AlixPartners LLP, where he co-led the global transportation and logistics practice.
He also led the global logistics practice for ICG Commerce, which is now a part of Accenture, and served several years in management roles with Maersk Inc., the world's largest steamship line.
Svindland faces the challenge of righting the ship at Celadon as it works through an array of financial challenges that include a projected $10 million loss in its most recent quarter, increased lender scrutiny over its operations and a loss of confidence by its auditor in the company’s recent financial reports.
In addition, Celadon’s stock is in danger of being delisted by the New York Stock Exchange after the company failed to meet NYSE standards for financial reporting, it said in a regulatory filing in May.
Will, 51, plans to retire as CEO and chairman of the board, but will remain as a consultant to the company through July 2018. He joined the Celadon in 1993 as controller.
Michael Miller, the lead independent director of Celadon’s board and chairman of the compensation committee, will replace Will as chairman.
"We believe Mr. Svindland is an excellent addition to our company, especially in light of his extensive experience in helping drive operational and financial improvements at transportation companies,” Miller said in written comments. “We believe his experience, energy, and perspective will help guide Celadon toward achieving our strategic initiatives and enhancing stockholder value.”