The Allen Lund Co. (ALC), a 3PL based in Southern California but with approximately 35 offices around the country, has acquired Des Moines Truck Brokers (DMTB), another company with a focus on moving foodstuffs.
Eddie Lund, president of ALC, said while both companies are involved in moving various types of food products, the customer lists differ. “One of the things that we looked at closely is the product mix and the diversity of their customer base,” Lund told FreightWaves in an interview. “They’ve been around a long time, so their customer base is very diverse and has very little overlap with us.”
Geographically, DMTB has one office: in Des Moines, Iowa. ALC has about 500 employees, roughly 400 of whom are directly involved in brokerage activities. DMTB will bring about 30 new employees into the company.
Lund said while ALC has offices in that region, “the offices we have there do not do much produce,” which is the primary product DMTB hauls in its brokerage system. He described the acquisition as a “bolt-on to what we do well,” adding, “They understand the produce business, and that brings more expertise and more customers to us.”
DMTB also hauls products such as proteins, Lund said.
When ALC began operations in 1976, it hauled only what Lund described as “exempt commodities.” During that time, before deregulation of the trucking industry, brokerages could only move exempt commodities — “basically anything not manufactured.” So fresh fish would have been considered exempt; frozen fish would not.
Lund described his company as “partly” a refrigerated hauler. But he said about 40% of ALC’s business is produce with 60-70% overall as food or beverages. “But across our network we have offices that don’t do any produce at all,” Lund said. ALC will haul dry products “and we will haul anything at this point. So we’re not bound by the actual products.”
In the brokerage business for food, there’s less competition than in dry products, “but you need a little more expertise to handle produce and refrigerated commodities.”
Lund said the market for brokerage assets has changed because of shifts in the market in the past six months. “The multiples are higher so that tends to increase the activity,” he said.
Although Lund did note that ALC will haul a wide range of products, “we’ve always been a big fan of food.”
“It’s not as glamorous a business, but people have to go eat no matter what,” he said. “So no matter what, it tends to be more recession-proof. It might not fly as high as when things are really cooking, but it doesn’t drop as much during the down times. But in the case of the acquisition of DMTB, Lund said he and his father, who founded the company, had a long relationship with Jimmy DeMatteis, the president and CEO of DMTB, who, like Lund, succeeded his father at the helm of the business.
“Right out of the gate, we knew Jimmy prior to this,” Lund said about some of the factors behind the acquisition. “At the end of the day, it’s finding the right people, whether you’re starting a new office or making acquisitions.”
He added that while ALC management was familiar with DeMatteis, who is staying with ALC, they did not know other members of the DMTB team. But after getting to know them, “we’re really delighted with the team that they’ve built there.”
In a prepared statement announcing the acquisition, DeMatteis was quoted as saying: “I have always admired the Lunds and the business they have built. As we have grown, I would be lying if I said we didn’t try in some way to emulate ALC.”