Roadrunner Transportation Services acquires Morgan Southern

Deal will help RRTS make inroads in intermodal sector

By ·

Non asset-based third-party logistics services provider Roadrunner Transportation Services (RRTS) recently announced it has acquired all of the outstanding stock of Morgan Southern, a privately-held provider of intermodal transportation and related services for roughly $20 million.

Based in Conley, Georgia, Morgan Southern serves several key intermodal markets with 19 terminals in the United States and a customer base comprised of direct shippers, intermodal marketing companies (IMC), steamship lines, and other port and rail related transportation industries.

During its fourth quarter earnings conference call yesterday, RRTS President and CEO Mark DiBlasi said that the acquisition provides a new service offering to the company’s truckload segment and expands its geographic profile.

“It also enables us to capitalize on favorable trends in the intermodal sector driven by growth in international trade and continued improvements in rail efficiency,” he said. “Aside from these overall strategic factors, our rationale for acquiring Morgan Southern is as follows: the domestic intermodal drayage market has generated approximately $4 billion in annual revenues, with several companies—or IMCs—having internal operations and the balance being fragmented.”

This, said DiBlasi, presents both risk and opportunity in the sector. And he added that in RRTS’ view high-quality companies will have growth opportunities at the expense of competitors. Morgan Southern, he added, has an excellent industry reputation for quality and service. He cited how even in instances where customers have internal drayage operations and plans to expand them, they still anticipated growth with Morgan Southern, which he expects to grow significantly with the backing of RRTS.

Morgan Southern management will continue to be led by Ben Kirkland, head of operations since 1996. DiBlasi explained that the fit with the management team and the culture of Morgan Southern eliminates one of the largest and most underappreciated risks of any acquisition.

In 2010, Morgan Southern generated approximately $57 million in revenue and $4 million in EBITDA. RRTS expects the acquisition to be accretive to its net earnings in 2011 and beyond.

Stifel Nicolaus analyst David Ross wrote in a research note that this deal has multiple potential benefits for RRTS.

“Due to seamless management transition, the company believes it can grow the [Morgan Southern] revenue base in 2011,” wrote Ross. “Roadrunner will give them more resources to grow (in addition to a much bigger account base) than they had in past under conservative private owner, and MS can leverage the company’s salesforce and provider relationships.”

Morgan Southern was advised during the sales process by EVE Partners, an Atlanta-based transportation and logistics M&A firm.

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Case Study: LEAN Yields Big Results
Every day, companies across a wide range of industries use LEAN in their supply chains, warehouses and distribution centers, finance departments, and customer service centers, among other areas. LEAN practices improve safety, quality, and productivity by extracting cost and waste from all facets of an operation – from the procurement of raw materials to the shipment of finished goods.
Download Today!
Hub Group Resources
Not Your Grandfather's Intermodal
Transportation of freight in containers was first recorded around 1780 to move coal along England’s Bridgewater Canal. However, "modern" intermodal rail service by a major U.S. railroad only dates back to 1936. Malcom McLean’s Sea-Land Service significantly advanced intermodalism, showing how freight could be loaded into a “container” and moved by two or more modes economically and conveniently. As with all new technologies, there were problems that slowed the growth, which influenced many potential customers to shy away from moving intermodal.
Click here to download
From the October 2016 Issue
Over the past decade we’ve seen a major trend in regards to safety regulations for freight transport within the United States as well as for import and export shippers—that trend is the “international­ization” of rules and regulations.
European Logistics Update: Post-Brexit U.K. moving ahead, but in which direction?
Badcock Home Furniture &more: Out with paper, in with Cloud TMS
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
How API Technology Connects the Transportation Economy
Dynamic decision making is made possible through accurate, actionable data. When combined with progress in data science and the Internet of Things, technology companies that add value to direct-to-carrier APIs and combine them with high-power data analytics will create new concepts for the information economy.
Register Today!
Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...

2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...