Carriers Looking at Acquisitions

“Carriers are looking for partners to ‘tango’ with as volume and rate expectations are very positive.”

That’s the comment of Richard Mikes, partner at Transport Capital Partners, about what the group’s most recent Business Expectations Survey says about attitudes toward buying or selling trucking companies.

Looking ahead, over half of the motor carriers said they would be interested in buying or selling a firm, according to TCP’s Second Quarter Business Expectations Survey. Larger carriers (over $25 million revenue) are twice as likely to be interested in buying as are their smaller counterparts.

In addition, while the industry appears to be improving for the next twelve months, almost one-fourth of the carriers are interested in selling within the next 18 months. Smaller carriers are more interested in selling than are larger carriers, with almost 40% of the smaller carriers wanting out compared to only 17.5% of the larger carriers.

“It is an ideal time to strategically determine what the best future strategy is and develop a plan to maximize the carrier’s value proposition,” said TCP Partner Lana Batts.

The number of carriers wishing to acquire another carrier has remained stable at 47-48% for four out of the last five quarters. TCP notes that sellers are expecting higher prices given the rise in equipment values, in increases in earnings, and higher multiples for publicly owned carriers over the last year.

Andy Ahern, CEO of Ahern and Associates, also says he likes the direction the industry is moving in. He’s already helped dozens of transportation companies close acquisition deals this year.

Most recently, Ahern’s group assisted Echo Global Logistics in acquiring Advantage Transport in addition to Atlantic Street Capital Partners in the acquisition of Patterson Motor Freight.

“Many companies through the first half of the year have engaged the services of our firm to structure an exit strategy or rebuild their business model,” explains Ahern. “We recently represented Arkansas Transit Homes who needed a buyer for their company in their sale to Bennett International Group.” Earlier this year, Ahern even represented publicly traded, Universal Truckload Services (UTSI) in the acquisition of Hart Transportation.

In addition to working with existing trucking and logistics companies who wish to expand operations, Ahern is also seeing a lot of interest from private equity firms who are now viewing transportation as a solid investment. “We’re seeing a lot of active buyers in 2011 who are either acquiring assets as part of their larger growth strategy or looking to transportation as an industry which will provide positive returns.”

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