LSO is acquired by Eagle Merchant Partners

Late last month, affiliates of Eagle Merchant Partners, a private equity firm in Atlanta with a concentration southeast U.S.-based middle-market buyouts, acquired Austin, Texas-based LSO (Lone Star Overnight), a parcel delivery company.

Eagle Merchant Partners said it invested roughly $20 million in equity for the LSO acquisition, coupled with support from institutional partners and family offices, as well as debt financing from NXT and New Canaan.

LSO serves thousands of customers daily and covers every address in Texas, Oklahoma, western Louisiana, southern New Mexico, and, through partnerships, California, the western U.S., and Mexico. LSO primarily functions as a regional small parcel delivery company with an integrated air, point-to-point mini-hub model. LSO also provides next-day and day-definite guaranteed services, with one of the industry’s highest reliability records and lowest damage rates.

The company is also active in e-commerce and is establishing strategic partnerships with many large companies in an effort to provide delivery services to various regions.

An Eagle Merchant Partners spokesman told LM that LSO was viewed as a good acquisition target, because it is an attractive company with good prospects, adding that the firm’s partners have logistics experience, coupled with liking the LSO team and the company’s upside.

“LSO does a first-rate job in terms of the costumer experience with one of the best reliability records and lowest damage rates in the industry,” the spokesman said. “We will continue the dedicated customer focus and service. We also plan to expand our offerings and service territory.”

Looking ahead, the spokesman said Eagle Merchant Partners is looking for acquisitions that will greatly expand the reach of LSO and will also make incremental investments in sales, technology, and channels down the road. For the time being, he said, it will be business as usual.

When asked what made LSO and the small parcel delivery market appealing to Eagle Merchant Partners, the spokesman said there are a few big names in the parcel delivery business but the firm felt LSO has a great territory and a strong brand, and more importantly that businesses and consumers will benefit from having more choices in the markets it serves.