Why sell a successful fleet right now?

Sept. 9, 2014

Today, the market for selling successful fleets is hot! 

There are four primary reasons truck fleets are selling for the best prices in years:

  1. Today, investors have more money waiting to be used than at any time in history.  Private equity firms are sitting on more than $1 trillion in uninvested capital, and the S&P 500 companies have more than $1.5 trillion to invest. The cash is available.
  2. Prices are up!  Well managed, profitable fleets are in demand.  Buyers are paying more: valuation multiples for middle-market companies are up from 5.9X in 2009 to 6.4X in 2014. For companies selling in the range of $100 to $250 million, multiples are up from 7.2X in 2009 to 8.3X in 2014.
  3. It takes 9 to 12 months to sell a medium or large fleet.  Therefore, there are no guarantees that the prices being paid today will continue to rise or fall in the next year.
  4. Most family-owned fleets do not survive long term.  88% of family-owned businesses believe ownership will not change, but only 30% of businesses survive into the second generation -- just 12% into the third generation and less than 3% into a fourth generation.  (Source: Family Business Institute)

Selling all or part of your fleet is a life-changing decision, and one that deserves serious consideration. 

You want to secure the best price and terms possible. The business climate plays a major role in determining when you should or should not sell.

What other factors do you consider when you are thinking about selling your company?

About the Author

John Sloan | Vice Chairman

John Sloan is the Vice Chairman of Allegiance Capital, a middle-market investment bank that works with business owners to help them sell or raise capital. 

John has more than three decades of C-level experience in investment banking and private equity.  He has personally executed transactions with fleet owners and understands the unique needs of the trucking industry. 

During his career, John has raised more than $1 billion in debt and equity.  He is an expert in all aspects of investment banking and has evaluated and negotiated the acquisition of more than 30 companies in: energy, construction, retail, telecom, environmental, logistics and manufacturing, with an aggregate value in excess of $7 billion.

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