Subscribe to our free, weekly email newsletter!


RRTS acquires G.W. Palmer Logistics

By Jeff Berman, Group News Editor
September 12, 2013

Non asset-based third-party logistics services provider Roadrunner Transportation Systems (RRTS) said this week it has acquired all of the outstanding equity of Batesville, Arkansas-based G.W. Palmer Logistics LLC, a non-asset truckload service provider.

RRTS said the purchase price was roughly $2.5 million, plus an earn-out capped at $2.8 million, adding that the acquisition was financed with borrowings under Roadrunner’s credit facility. And it added that for calendar year 2012 G.W. Palmer generated roughly $20 million in revenues, with G.W. Palmer expected to be accretive to Roadrunner’s near term earnings.

“The G.W. Palmer acquisition enhances our truckload service offering in the South due to its concentration in temperature controlled products,” said Mark DiBlasi, President and CEO of Roadrunner, in a statement. “G.W. Palmer’s management team will remain in place and are excited about the growth opportunities we collectively envision. We look forward to supporting and expanding G.W. Palmer’s strong customer relationships and service record as we expand the business.”

RRTS continues to make acquisitions at a fervent rate, with this deal following recently announced acquisitions of Marisol International LLC, a non asset-based supply chain-critical, provider of international logistics services http://www.logisticsmgmt.com/article/rrts_acquires_marisol_international_expands_international_services”>in late July and the Southeast drayage division of Transport Corporation of America (TA Drayage), a provider of intermodal transportation and related services in the Southeast, in August.

DiBlasi recently told LM that RRTS intends to remain active on the acquisition front.

“We have a profile we use for [acquisitions],” he said. “Since January 2006, we have made a total of [26] acquisitions and look for companies that are well-run and well-managed profitable businesses and non-asset or light-asset in their business model. Even though we acquire some companies with assets at times, we do look for companies that provide capacity that are actual carriers and are going to give us additional reach…or compliment existing resources as we build out our portfolio of services and are immediately accretive. Integration is also key as we look for a very strong cultural fit between the management team we are acquiring and our management team. If that fit is not there, we will walk away from a deal; we have done that before.”

Stifel Nicolaus analyst David Ross recently wrote in a research note that this summer Roadrunner announced a public offer of 4.3mm shares of common stock, consisting of 1.5mm primary shares, and 2.8mm of secondary shares from selling stockholders, adding that it will also grant a 645,000 share over-allotment option (15% of the total issue) to come exclusively from current ownership.

And BB&T Capital Markets analyst Thom Albrecht commented in a research note that this move by RRTS is another classic tuck-in acquisition.

“Contrary to the view of some, RRTS is not making acquisitions on a helter-skelter
Basis,” Albrecht wrote. “During the past couple of years nearly all deals have been done to fortify existing niches such as TCS (temperature controlled services, intermodal and TMS. While the recent Marisol deal expanded RRTS into global freight forwarding, other deals strengthen core competencies.”

 

 

 

About the Author

Jeff Berman headshot
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. .(JavaScript must be enabled to view this email address).


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!

Recent Entries

Even as Congress was putting the finishing touches on a 10-month short-term funding extension to the federal aid highway bill that temporarily averts a funding crisis, Transportation Secretary Anthony Foxx was ripping the measure as a short-term “gimmick” that once again fails to adequately fund U.S. infrastructure needs in the long run.

ISI is comprised of Integrated Services, ISI Logistics and ISI Logistics South and is focused on the warehousing and transportation needs of automotive shippers. RRTS said that in 2013, Integrated Services generated revenues of approximately $21 million adding that Integrated Services is expected to be accretive to Roadrunner’s earnings in 2014.

The market for supply chain management software continues to expand, highlighting the importance of software in today’s supply chains.

Over the past five years emerging markets have maintained their “growth dynamic,” observes John Manners-Bell, CEO, of the London-based think tank Transport Intelligence (Ti).

Amid the talk and coverage about things negatively impacting the trucking industry like increasing regulations, tight capacity, and equipment-related issues and challenges, there is one thing to always remember about the sector: it moves a lot of freight, make that more than a lot, actually.

Article Topics

News · 3PL · RRTS · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA