A slowdown in trucking M&A was met by interest rate cuts for the first time in more than four years in 2024. The anticipation of lower lending rates fostered more constructive transaction dialogues during the year, but deal count across the industry was still off 5% from 2023, according to data compiled by the research team at Left Lane Associates.
The supply chain M&A advisory firm said there is noise in the number as some deals were paused until after the election, which pushed closings into the first quarter of 2025.
“We are seeing a lot of positive M&A momentum leading into Q1 and beyond as we move further away from the tail end of the freight recession and with the more business-friendly administration coming into power,” Left Lane’s president, Peter Stefanovich, told FreightWaves. “We are anticipating a substantial uptick in sellers coming back to the M&A market, especially those that were planning on selling in 2023 and 2024.”
Well-capitalized companies generating significant cash flow were active again in 2024. Some companies executed strategic acquisitions, with others making more transformational deals. Some even provided updates on possible spinoffs. There were several notable deals in trucking in 2024. Here’s a recap in chronological order.
Forward Air finally closes Omni deal but drama lingers
Shareholder lawsuits, court injunctions and a legal back-and-forth between acquirer and target were the 2023 headlines that followed Forward Air’s (NASDAQ: FWRD) announcement it would merge with freight forwarder Omni Logistics. The fallout continues after Forward grudgingly closed on the deal in late January.
When announced, an initial price tag of $3.2 billion drew outcry from investors who were miffed they weren’t given a vote. A high debt load and a shift in control to Omni’s private equity stakeholders were among chief complaints. Some of Forward’s customers also had concerns that their linehaul provider (Forward) was acquiring one of their competitors.
Forward has revamped its board and executive team this year as it navigates a course that includes both its legacy expedited less-than-truckload business and its newfound air and ocean freight forwarding offering. But some shareholders haven’t dropped an effort to effect change at the company. The group views Forward’s current strategy and high debt leverage (5.4 times adjusted earnings before interest, taxes, depreciation and amortization) as untenable.
Shareholders have called on Forward’s board to engage in strategic alternatives, including a potential sale to private equity. Taking the company private would allow it to iron out a marketing strategy and fix its balance sheet without the burden of quarterly reporting to the public. FreightWaves previously reported that Forward had retained investment bankers to explore a sales process, but the company hasn’t commented on the matter.
Shares of FWRD remain 70% lower since the deal was announced in August 2023. Shares fell 90% from the announcement date to the May 2024 low. The bounce back is likely tied to a potential sale.
- Forward Air-Omni merger dustup heads to trial Friday
- Forward Air-Omni merger finally closes
- Forward Air books big loss in post-merger Q1; stock drops 30% premarket
- Forward Air shareholders file class action complaint over Omni merger
- Forward Air hires former YRC CFO Jamie Pierson
- Forward Air cuts workforce as it navigates post-merger landscape
- Forward Air investor flips to activist, may explore ‘strategic alternatives’
- Activist investor urges Forward Air to go private
- Chorus of investors calling on Forward Air to consider a sale grows
- Forward Air retains investment bankers to sell company, sources say
Ryder boosts dedicated offering in Cardinal Logistics acquisition
Ryder System (NYSE: R) significantly expanded its dedicated offering with the February acquisition of Cardinal Logistics. The $297 million purchase price included Cardinal’s 3,400 drivers, 2,900 trucks and 200 locations. Cardinal serves consumer packaged goods, omnichannel, automotive and industrial customers.
In addition to being a dedicated contract carrier, Cardinal provides freight brokerage, final-mile and contract logistics services. The deal was forecast to add $1 billion in revenue ($800 million in operating revenue) to Ryder’s dedicated transportation business, which reported total revenue of $1.8 billion (operating revenue of $1.3 billion) in 2023.
The operation was acquired from private equity firm H.I.G. Capital and not expected to be accretive to Ryder’s earnings until 2025, following integration and the realization of deal synergies.
TFI closes Daseke deal, eyes potential spinoff
TFI International (NYSE: TFII) doubled the size of its specialty truckload unit when it closed on a $1.1 billion acquisition of flatbed carrier Daseke in April. The price tag represented a 70% premium to Daseke’s share price and valued the company at roughly six times trailing-12-months adjusted EBITDA.
Daseke was a rollup of TL fleets, completing more than 20 acquisitions of mostly family-owned flatbed operators since its 2009 inception.
TFI continues to talk about splitting up into two separate publicly traded companies – one business solely focused on TL and another providing LTL, package and courier, and logistics services.
TFI recently said it needs a roughly $20 billion market cap (currently $11.4 billion) to execute a spinoff. It said that would require another large acquisition likely in the $4 billion to $5 billion range. It’s eyeing the U.S. LTL market and hopes to get a deal done as soon as late 2025, with a spinoff occurring as soon as late 2026. TFI has already started separating assets and real estate for an eventual split.
The company also acquired LTL carrier Hercules Forwarding, which has 31 terminals and $100 million in revenue, in March.
Excluding a large deal, TFI guided to $200 million to $300 million in acquisitions for 2025, which is in line with past years.
Auto haulers combine, go public
Proficient Auto Logistics (NASDAQ: PAL) led a roughly $180 million rollup of car-hauling peers and became a publicly traded company in May. The collective included fellow nonunion auto haulers – Delta Automotive Services, Deluxe Auto Carriers, Sierra Mountain Group and Tribeca Automotive – debuting under the Proficient name at $15 per share.
The initial public offering raked in a total of $212 million in net proceeds inclusive of the customary 15% over-allotment.
The Proficient network includes about 1,200 trucks producing nearly $400 million in annual revenue. In August, it announced the acquisition of Auto Transport Group, boosting its coverage in the West. That deal was expected to be immediately accretive to earnings.
Shares of PAL hit a post-IPO peak of $21.01 in July but began falling as auto-hauling demand sagged. Shares took a hit in mid-October when the company provided a third-quarter update signaling weaker volumes and revenue per load. It ended up posting a 98.8% adjusted operating ratio (inverse of operating margin) in the quarter following more favorable performances (low-90% ORs) in prior periods.
The stock is off 46% since the IPO.
Proficient is working to fully integrate the six carriers on the same TMS and reporting systems. It’s looking to improve results by placing more shipments on company-owned trucks rather than through its subhauler relationships, and to capture more backhaul opportunities across the larger platform.
RXO jumps to third-largest broker with Coyote acquisition
RXO (NYSE: RXO) became the third largest freight broker in North America when it completed the acquisition of Coyote Logistics from UPS (NYSE: UPS) in September. (The deal was announced in June.) The $1.025 billion transaction valued Coyote at roughly 12 times trailing adjusted EBITDA and closer to nine times when including anticipated synergies. The debt-and-equity deal included share sales to RXO’s top two stockholders: MFN Partners and Orbis Investment Management.
The transaction also included a services agreement with UPS through 2030.
Coyote’s $3.2 billion in revenue pushed RXO’s top line to roughly $7 billion. There is little customer overlap between the two companies. Coyote has significant exposure to the food and beverage industry and works with large carriers and private fleets. RXO has traditionally worked with small carriers moving retail and industrial freight.
RXO is now focused on extracting $40 million in cost synergies from the combination in addition to its efforts to reduce its roughly $5 billion to $6 billion in combined annual purchased transportation spend.
Coyote was acquired by UPS in 2015 for $1.8 billion.
RXO was spun off from XPO in 2022.
- RXO shares soar on news of Coyote deal; combined company to be third-biggest 3PL
- RXO completes $1B acquisition of Coyote Logistics
Knight-Swift filling in LTL map
Knight-Swift Transportation (NYSE: KNX) acquired Dependable Highway Express’ (DHE) LTL operations for an undisclosed amount in July. This was Knight-Swift’s third LTL acquisition since entering the industry in 2021.
DHE had $122 million in annual revenue and a 90% OR at the time of the announcement. It operates 14 terminals in the West, providing direct one-day service in California, Nevada and Arizona. The deal was immediately accretive to Knight-Swift’s earnings.
Knight-Swift jumped into the LTL arena in 2021 when it acquired AAA Cooper Transportation and its approximately 70 terminals in the Southeast and Midwest for $1.35 billion. Months later, it acquired Midwest Motor Express (an Upper Midwest and Northwest regional carrier) and its 33 facilities for $150 million. Knight-Swift has also acquired more than 50 terminals and leases, including 25 properties from bankrupt Yellow Corp. (OTC: YELLQ), since getting into the business.
Knight-Swift now has more than $1 billion in annual LTL revenue with coverage of approximately 70% of the U.S. population. The Northeast remains the last section of the map to fill.
Schneider acquires Cowan, nears $2B in dedicated revenue
Schneider National (NYSE: SNDR) acquired Cowan Systems for $390 million (and some of its real estate in separate transactions totaling $31 million) in November. A margin profile for Cowan was not provided but the deal is expected to be accretive to Schneider’s earnings in the first year.
Cowan is a 100-year-old dedicated carrier with a fleet of more than 1,800 trucks, 7,500 trailers and a network of 500 contracted carriers (owner-operators). It primarily serves the retail, food and beverage, industrial, and building materials industries through its more than 40 terminals in the eastern U.S. It also provides brokerage, drayage and warehousing services.
Cowan moves Schneider’s dedicated top line close to $2 billion and its fleet to more than 8,400 tractors (nearly double where it was in 2021). Schneider acquired dedicated carriers Midwest Logistics Systems (900 trucks) for $263 million in 2022 and M&M Transport Services (500 trucks) for an undisclosed amount last year.
Cowan will operate as a wholly owned subsidiary of Schneider, with results reported through both Schneider’s TL and logistics segments.
FedEx moves forward with plan to spin off LTL unit
FedEx (NYSE: FDX) confirmed in December that it will move forward with a plan to spin off its LTL unit, FedEx Freight. The company first floated the idea on a quarterly conference call in June.
Details on the transaction were sparse but FedEx said it plans to separate the companies over the next 18 months, leaving FedEx’s legacy air, ground and parcel segments (generating nearly $80 billion in revenue) and FedEx Freight ($10 billion top line) as two stand-alone publicly traded companies.
Breaking away from the conglomerate model is expected to unlock “significant value” for shareholders. FedEx trades at a low-double-digit multiple, but shares of best-in-class LTL carriers have traded as high as 40 times earnings since the pandemic.
Estimates from experts have pegged the value of FedEx Freight as high as $30 billion.
- FedEx to spin off LTL unit; lowers full-year guidance
- A stand-alone FedEx Freight gives LTL investors another pure play
Other notable deals
J.B. Hunt (NASDAQ: JBHT) acquired Walmart’s (NYSE: WMT) intermodal fleet of containers and chassis in February. The transaction also included a long-term volume commitment from Walmart. (No further details were provided.) J.B. Hunt later said it had sold the chassis acquired in the deal as they didn’t fit the retrofitted containers in its legacy fleet. The company also said the container fleet purchase was an extension of its initiative to grow its fleet to 150,000 units by 2027.
Kenan Advantage Group (KAG) made several acquisitions this year, including the addition of the largest dry bulk fleet in the Carolinas. KAG is North America’s largest tank trucking company and was also rumored to be contemplating an initial public offering in April.
Expedited ground service providers Midwest Express and Sterling Transportation announced a capacity-sharing agreement in May, which is aimed at creating a national wholesale linehaul network. The alliance affords the group expanded coverage and more direct routings between major airports. Midwest Express rebranded as Forwarders Xpress in conjunction with the deal.
Transfix sold its brokerage unit to trucking, drayage and warehousing conglomerate NFI for an undisclosed sum in June. A 2013 digital startup, Transfix struggled with its brokerage business during a prolonged freight recession. The company pulled plans to go public in 2022. Transfix is now focused on its transportation software and data offerings.
C.H. Robinson (NASDAQ: CHRW) announced in July the sale of its European surface transportation business to German road freight forwarder Sennder Technologies for an undisclosed sum. The business made up most of C.H. Robinson’s “other surface transportation” unit, which recorded adjusted gross profit of $74 million in 2023. The sale is part of C.H. Robinson’s strategy “to get fit, fast and focused” and to improve profit across its core segments.
Rumors resurfaced in August that XPO (NYSE: XPO) was again shopping its European transportation unit. The trucking and logistics business could fetch more than $2 billion, experts have estimated. The divestiture of the unit would be the last step in the breakup of XPO Logistics, leaving XPO as a pure-play, LTL carrier.
A majority stake in LTL carrier Roadrunner (OTC: RRTS) was sold in November to Prospero Staff Capital, a private equity firm backed by Roadrunner CEO Chris Jamroz. The group replaced Elliott Investment Management, which will retain a minority interest. Roadrunner will use an undisclosed amount of new capital from the deal to fund its organic growth initiatives and make acquisitions.
FreightVana announced in December that it is acquiring Loadsmith’s brokerage arm for an undisclosed amount. The deal is expected to expand FreightVana’s trailer pool, boosting its power-only offering.
Pitt Ohio became the 12th-largest LTL carrier in the U.S. when it acquired fellow carrier Sutton Transport in December. The deal expanded Pitt Ohio’s presence in the Midwest, adding 13 terminals, 384 power units and 455 drivers. Pitt Ohio now generates more than $1 billion in annual revenue.
DAT Freight & Analytics, a division of Roper Technologies (NASDAQ: ROP), acquired Trucker Tools for an undisclosed sum in December. The deal plugs Trucker Tools’ load tracking and capacity sourcing technology, which serves more than 750 brokers and 350,000 drivers, into the DAT platform.
