Schneider National announced Monday it has entered into an agreement to acquire Cowan Systems for $390 million. The deal will significantly expand Schneider’s dedicated unit.
Schneider (NYSE: SNDR) also entered separate agreements to acquire $31 million of Cowan’s real estate assets.
Baltimore-based Cowan is a 100-year-old dedicated truckload carrier serving the retail, food and beverage, industrial and building materials verticals with a fleet of over 1,800 trucks and 7,500 trailers. It also has a contracted carrier network with 500 owner-operators.
The company has more than 40 terminals in the Eastern U.S. and provides other services like brokerage, drayage and warehousing.
Following the deal, Schneider’s dedicated fleet will include more than 8,400 tractors, accounting for approximately 70% of its TL assets. Schneider’s annual dedicated revenue is now close to $2 billion with its consolidated revenue likely moving above $6 billion.
| Acquisition price | $390M (plus $31M for real estate) |
| Schneider revenue run rate | ~$6B consolidated, nearly $2B dedicated (pro forma) |
| Earnings expectations | accretive in year one |
| Recent acquisitions by Schneider | M&M Transport, Midwest Logistics Systems |
The deal will be accretive to Schneider’s earnings in the first year, before accounting for expected synergies.
Schneider will use cash on hand and a new $400 million credit facility to fund the acquisition, which is expected to close before year-end.
Cowan will operate as a wholly owned subsidiary of Schneider, with its results reported in both Schneider’s TL and logistics segments.
“This acquisition aligns with Schneider’s long-term vision to have customer-centric Dedicated solutions as the cornerstone of its Truckload segment,” said Mark Rourke, Schneider president and CEO, in a news release. “By complementing our organic Dedicated growth success with transactions like this, we are broadening our presence to provide greater value to our customers and stakeholders.”
Schneider was operating 4,498 dedicated trucks at the end of 2021, before its recent dedicated acquisition blitz.
It acquired Midwest Logistics Systems and its 900 tractors for $263 million in January of 2022. It acquired M&M Transport Services and its 500 trucks for an undisclosed sum in August of last year.
Schneider generated revenue of $1.38 billion in its dedicated division during the last 12 months.
“When it was time for me to move to a new chapter in my life, I wanted to be sure the organization was in good hands, at a company with a similar culture and values, and that it would continue to grow,” said Joe Cowan, Cowan chairman. “With Schneider I know our legacy will not just be preserved, but it will continue to thrive.”
Cowan is known as “the lightweight fleet” throughout the industry as its lighter equipment is touted for allowing “customers to move more freight per shipment.”
Shares of SNDR were up 2.3% at 12:28 p.m. EST on Monday compared to the S&P 500, which was up 0.1%.