RRTS acquires Southeast drayage division of Transport America

Roadrunner Transportation Systems (RRTS) said last week it has acquired certain assets of the Southeast drayage division of Transport Corporation of America (TA Drayage), a provider of intermodal transportation and related services in the Southeast.

By ·

Not long after announcing it had acquired Marisol International LLC, a non asset-based supply chain-critical, provider of international logistics services, non asset-based third-party logistics services provider Roadrunner Transportation Systems (RRTS) said last week it has acquired certain assets of the Southeast drayage division of Transport Corporation of America (TA Drayage), a provider of intermodal transportation and related services in the Southeast.

RRTS said the purchase price was roughly $1.2 million and was financed with the company’s cash on hand. This is the second acquisition RRTS has made since its December 2012 public offering of 3,500,000 shares of common stock at a price of $17.25 per share to the public, with Marisol being the other one.

TA Drayage, said RRTS, transports imports and exports for steamship lines and intermodal marketing companies from the ports of Charleston, South Carolina, Norfolk, Virginia and Savannah, Georgia and it also services the rail ramps of Atlanta, Georgia, Memphis, Tennessee and Birmingham, Alabama.

For calendar year 2012, TA Drayage generated roughly $20 million in revenues. RRTS said the acquisition is expected to be accretive to Roadrunner’s 2013 earnings.

“The TA Drayage acquisition enhances the scale and density of our intermodal services in the Southeast, complementing our asset-light service offering with the addition of over 100 independent contractors,” said Ben Kirkland, president of Roadrunner Intermodal Services, in a statement. “We will absorb the TA Drayage operations into our existing Southeast RRIS locations, and we look forward to supporting and expanding TA Drayage’s strong customer relationships and service record as we pursue continued growth in the business.”

Cudahy, Wisconsin-based Roadrunner’s quarterly net income of $14 million was up 37.0 percent annually, and earnings per share saw a 15.6 percent bump to $0.37. Net income—at $104 million—was up 26 percent.

The company’s president and CEO Mark 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 Roadrunner recently 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.

He said that this deal will leave more room for further acquisition, like the Southeast drayage division TA Drayage that was announced yesterday after the close.

“The TA Drayage deal—which further builds on Roadrunner’s intermodal capabilities—was the sort of small, tuck-in that we see as low risk and incrementally accretive,” he wrote. “We believe management has a couple more acquisitions in the pipeline for this year. Previous deals have been accretive, and we expect management to remain disciplined on this front. Strategically, an expedited carrier may help fill out the service portfolio, but future acquisitions should be bolt-ons, in our view.”


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!

Article Topics

3PL · RRTS · All Topics
Latest Whitepaper
Revisiting Supplier Relationship Management to Boost Real Value in the Supply Chain
Supplier relationship management (SRM) initiatives are on the rise, and companies who successfully implement these programs can realize a significant return on their technology investments.
Download Today!
From the May 2017 Issue
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management, but what sort of technologies fall under these broad terms, and how will they change the management capabilities at our disposal? To find out, we talked to some noted supply chain analysts, consultants and technology executives and gathered six digital trends to watch.
Transportation Trends and Best Practices: The Battle for the Last Mile
2017 Technology Roundtable: Are we closer to “Intelligent” Logistics?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Going Beyond Rate Negotiations for Logistics Cost Savings
The pressure to reduce cost is a fundamental part of every organization today leaving many supply chain professionals constantly renegotiating rates. This webcast examines four areas that may hold untapped savings potentials and even help organizations negotiate better rates.
Register Today!
EDITORS' PICKS
The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...

LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...