Roadrunner Transportation Services acquires Bruenger Trucking

Non asset-based third-party logistics services provider Roadrunner Transportation Services (RRTS) said this week it has acquired all of the outstanding stock of Wichita, Kansas-based truckload services provider Bruenger Trucking Company.

The sale price, according to Roadrunner officials, was roughly $10.6 million, coupled with an earn-out capped at $3 million.

Bruenger, according to Roadrunner, is primarily a refrigerated (“reefer”) carrier in the United States and uses both independent contractors and its own fleet.

“Taking the company public in May 2010 enabled us to de-leverage the company to become debt-free and we did that to position the company to continue to grow organically and through acquisitions,” said Mark DiBlasi, President and CEO of Roadrunner, in an interview. “This was a nice strategic tuck-in acquisition that fits in very well with our existing services that we provide to our customer base.”

In the 2010 calendar year, Bruenger generated roughly $23 million in revenues and $3.5 million in EBITDA.

DiBlasi said Bruenger is a very well-run and respected company, adding that its midwest location compliments its truckload division because Roadrunner’s existing truckload division is primarily based on the eastern seaboard and east of the Mississippi River. Bruenger brings a nice geographic expansion in the middle of the U.S. and helps the east-west traffic lanes RRTS currently uses.

“Prior to this acquisition, about 65 percent of our truckload business was refrigerated goods and Bruenger also has 65 percent of its business in refrigerated goods, too,” he said. “It ties in nicely with what we are hauling in the truckload business. The real advantage to this deal, I think, is that capacity is going to tighten up significantly and unlike truckload brokerage companies that carry no capacity whatsoever, they are going to be at the mercy of whatever capacity is available to them. We are a non-asset based carrier, but we have a significant number [1,700] of independent contractors in our system, and we want to at least control that capacity as it tightens up. Bruenger brings a certain amount of capacity to us as well as a nice geographic fit to our existing truckload services and also gives us an opportunity to compliment our less-than-truckload (LTL) services that we move via independent contractors and owner-operators or purchased transportation that gives us more capacity for LTL linehaul movements, too.”

Stifel Nicolaus analyst David Ross wrote in a research note that this acquisition makes sense on multiple levels for Roadrunner.

“While this is more asset-based than the traditional Roadrunner deal, the company believes that securing capacity should help its overall asset-light offering in a capacity crunch scenario,” wrote Ross.

The analyst’s report also noted that about 65 percent of Bruenger’s revenue comes from its reefer business, adding that Bruenger has 100 company-owned tractors, while owner-operators provide an additional 45-50, and 216 trailers, about 80 percent of which are refrigerated). Another positive for Roadrunner cited by Ross is that Bruenger’s fleet is fairly young, requiring no immediate “catch-up” capex that other carriers are facing, coupled with the fact that Bruenger has good CSA scores, which should not result in any forced driver turnover, as it becomes part of Roadrunner.

Earlier this year, Roadrunner acquired Morgan Southern, a privately-held provider of intermodal transportation and related services for roughly $20 million.