Sale of Westwind Express Eases Pressure for Firm’s Co-Founder

Steve Keihner is thrilled not to be his own boss.

After 14 years as owner of the Westwind Express courier service of Newbury Park, Keihner has sold the rapidly growing company to Consolidated Delivery & Logistics, an air and ground delivery service based in Clifton, N.J. The companies would not disclose the terms of the transaction.

Westwind Express and its 225 employees will remain in place, with Keihner staying on as Consolidated Delivery’s West Coast regional manager. The transaction will allow Keihner to remain fully enmeshed in the delivery industry, but without all the risks and pressures associated with company ownership.

“I love the work I do, but there is also tremendous amount of background stress when you own a company,” said Keihner, who co-founded the same-day delivery service with his father, James.

“I’m an employee now--I work for these gentlemen, and ultimately what they say goes,” he said. “Ten years from now I would have been far wealthier than selling today. But I got my threshold of income, what I need to be happy. For me, this is a perfect balance.”

Consolidated Delivery has 70 locations in 24 states, most in the northeast and southeast. In the west, Consolidated Delivery has offices in the Northern California cities of Burlingame and Santa Rosa and is looking toward further expansion.

“I have the opportunity to be the regional manager from Seattle all the way down to Phoenix,” Keihner said. “Any operations they have will be under our wing. That, to me, was appealing. I’m used to being in a position of control of resources and people.”

During Keihner’s tenure at the helm of Westwind Express, the company grew from $300,000 in annual sales to about $7 million in 1998 and a projected $8 million for 1999. The biggest growth came over the past four years, during which the privately held company increased its sales 30% to 40% annually, Keihner said.

Westwind Express started out with the company headquarters in Newbury Park and has since added offices in Van Nuys, Ontario, Palmdale, Fresno and Sacramento. At the same time, it grew from one van and one pickup truck to a fleet of 110 company-owned vehicles and 80 driver-owned vehicles.

“They say in Newbury Park you can’t grow. Well . . . ?” said Keihner, whose clients include Airborne Express and Hewlett-Packard.

“There’s a lot of issues obviously in being successful,” he said. “One of the most important is hiring outstanding employees, compensating them well, setting up a solid management system and a solid accountability system.

“Our corporate office was in Newbury Park,” he said. “But to the customer, who never comes to the office, we were all over Southern California.”

To present a regional image, Keihner said, the company promoted its delivery service aggressively in West Los Angeles and across the San Fernando Valley. The company also set up driver bases throughout the area.

While Keihner was attracted to the size and security of Consolidated Delivery, it was Westwind’s success in California that caught the eyes of executives at the New Jersey firm.

“This gives us a half dozen cities we weren’t in, and all of a sudden we’ve got a major presence on the West Coast,” said Drew Kronick, vice president of Consolidated Delivery.

“We wanted a company that had exceptional management, a proven track record and could step right in and become a major player in our organization,” Kronick said.

Kronick said the market is heavily represented by Fortune 500 companies in certain industries including pharmaceuticals, office supplies and computer software and hardware. Acquisitions such as Westwind, he said, are made to increase the company’s visibility.

“The industry is growing dramatically,” Kronick said.

“There are about 10,000 companies around the country that look like Westwind--though not all of the same quality--so there’s a tremendous amount of opportunity for growth through acquisitions,” he said. “Acquisitions bring us into new markets, add to existing regions or give us strategic play in other markets.”

The Westwind acquisition was the 24th for Consolidated Delivery since the company was founded in 1995. It was the third acquisition thus far in 1999, with the three new companies accounting for about $25 million in aggregate revenue, Kronick said.

Keihner said his new responsibilities will include identifying West Coast delivery operations that would be good future acquisitions for Consolidated Delivery.

In addition to developing the delivery operation, Keihner will continue to follow businesses that Westwind has branched into over the past four years.

The company provided drivers for Kia Motors’ advertising campaign of driving cars 100,000 miles in 100 days as a test of their durability and will continue to provide driving tests for car manufacturers. Out of offices in Sacramento and Kansas City, Kan., Westwind Express also has established an aircraft services business, loading and unloading airplane freight.

“We’ve engineered ourselves not to be just a delivery company, but to do what we do and have offshoot business,” Keihner said.