Daseke (NASDAQ: DSKE) announced its latest acquisition, Builders Transportation, after market close Thursday.
Daseke purchased the Memphis-based steel and aluminum carrier for $53.8 million, including $3.4 million in Daseke stock. Builders Transportation reported an estimated $72.4 million in revenue and an estimated $9.7 million in Adjusted EBITDA for the trailing 12-month period ended June 2018.
Builders Transportation operates a fleet of over 300 company trucks and almost 500 spread-axle trailers. It performs flatbed operations across the contiguous U.S., with a heavy focus on the eastern two-thirds of the country.
The company has been family owned and operated since 1961. It hauls coil steel, wire products, structural and sheet steel, aluminum products, building materials, cast iron, steel pipe and machinery, according to a Daseke media release.
“We’ve had Builders Transportation on our radar for quite some time. We’ve been impressed with the focus and family-rooted culture of the company,” Daseke CEO Don Daseke said. “They work with A-list customers, and like our other operating companies, have a passion for their people. The company has been in business since 1954 and it has a long legacy as a family-run operation. They will be a great addition to the Daseke family.”
The acquisition is in line with Daseke’s strategy of consolidating mostly flatbed trucking companies while allowing them to continue to operate as individual units, with their pre-acquisition names intact.
It’s this autonomy that attracted Builders Transportation CEO John Phillips to Daseke.
“Over the years, we’ve had companies approach us, but we never took any of that seriously. We didn’t want to give up what our family has built,” Phillips said. “We have a long history and are very protective of our heritage. We have people here who have been with us their entire career. Being with Daseke lets us continue being who we are, and that’s critically important to us.”
A few months ago, FreightWaves reported on Daseke’s new Daseke Fleet Services, the company’s answer to some of the inefficiencies created by its acquisition strategy.
“Among the types of activities that might fall under the new group, Daseke President Scott Wheeler rattled off numerous tasks,” FreightWaves reported in a previous article. “Some are obvious, like fuel. But others he cited might be considered less obvious, like having a broad national group to keep its fingers on the pulse of resale markets for many products Daseke now disposes of in secondary markets, as well as purchasing new equipment.”
Daseke’s new group appealed to Builders Transportation COO Gene Phillips.
“The group of operating companies we’re joining reads like the ‘who’s who’ in flatbed and specialized trucking,” Phillips said. “We’re looking forward to sharing best practices and comparing notes on business strategy with our new sister companies. The consolidated purchasing power, through Daseke Fleet Services, is also very compelling. We expect it will help us reduce our costs and make us even stronger.”
Cowen commented on the acquisition Friday, calling it “moderately accretive for Daseke.” It went on to say it will wait until the company’s next quarterly results come in before considering any adjustments.
Seaport Global spoke to Daseke’s acquistion strategy in an early July report.
“Daseke is actively working to modify its debt and, if a transaction size warranted it, Daseke could expand its revolver beyond its current $100 million capacity by securing its receivables,” the report reads. “We are confident that Daseke’s near-term M&A goals can be accomplished without returning to the equity markets.”
Daseke’s stock was down 2.21 percent as of 2:05 p.m. Friday.
