Going shopping Look for merger and acquisition activity - already running at a breakneck pace - to heat up over the next year or two. That's the word from Chapman Assoc., a consulting firm specializing in mergers and acquisitions in the transportation arena, which has just released a survey of 15,000 owners of transportation companies. Not only will the activity increase, the deals are getting bigger and bigger, with the strongest demand for dry van carriers or logistics companies that have revenues of between $5 million and $10 million, and that operate out of the Midwest or the Southeast.
What's driving the activity? "Record highs in the public stock market, historically low interest rates, and the desire of older owners to retire remain the most significant factors behind deals," according to Richard Jackim, president of Chapman. Highlights of the survey: One out of five motor carriers is actively looking to sell their companies; 40% of active sellers are motivated by a desire to retire; 17% of the sellers were simply tired of the headaches; one in ten were interested in buying; and 60% of buyers use the market value of equipment plus a percentage of revenues to value acquisitions.
Jackim also notes that the number of active sellers continues to decline. "Since the percentage of active buyers remained relatively constant," he explains, "we conclude that the market for motor carriers is beginning to tighten, making this a good time to sell."
In that vein, Northern Dancer Corp. completed its acquisition of U.S. Trucking last month and changed its name to U.S. Trucking Inc. Also, the company named Danny L. Pixler president and chief executive officer. LinkAmerica Corp., a Tulsa, Okla.-based trucking group, purchased the operating assets of Ampace Corp., a Knoxville, Tenn.-based dry freight truckload carrier with shorthaul operations in Orlando and Columbus, Ohio.
Landstar System has announced new services. Landstar Ligon, the company's flatbed, heavy, and specialized hauling division headquartered in Madisonville, Ky., will team with DFB, an independent carrier located just west of Jacksonville, Fla., that specializes in transporting pleasure boats across the country. In another expansion, Landstar Express America, a company arm that handles expedited multimodal cargo throughout the world, has opened Cargo Handlers, an independent agency based in Boston that handles expedited freight.
Driving the talk Some 55 drivers from Roadway Express gathered at Volvo Trucks North America Inc.'s truck assembly plant were recognized for racking up more than 3-million miles without encountering an accident. Combined, they have traveled 178-million accident-free miles. The veteran drivers were each given the keys to a new Volvo truck to recognize their accomplishments. As part of Roadway's safety-recognition program, the drivers will be permanently assigned to the new Volvo trucks, which have their name and "3 Million Miles Safe Driver" displayed on the door.
"Individually, each driver has achieved a safety milestone that represents the pinnacle of success for a truck driver," said Marc Gustafson, president and CEO of Volvo Trucks. "Each one is a credit to his family, his profession, his company, and this industry. Volvo also commends each driver for sharing the roads safely with millions of other motorists."