Daseke buys out the founder in a $108 million transaction

Pickup truck maker Daseke said Monday it would buy out founder and former chairman Don Daseke. A $107.6 million stock repurchase agreement from Daseke and its affiliates is expected to close “later this week.”

The airline will use $40 million in cash and issue more than 67,000 preferred shares to complete the transaction. Daseke’s holdings represent 28.6% of the Company’s total outstanding common shares. Daseke will step down from the board of directors and he and his affiliates will be barred from acquiring shares in the company for five years.

A recently announced plan by the company to buy back $40 million of stock has been put on hold. Last month, nearly $4.9 million worth of stock was repurchased under this program.

“Shortly after the announcement of our $40 million buyback program, Mr. Daseke informed us of his desire to sell his interests in the Company for estate planning purposes, to retire from the Board of Directors and to focus his efforts on his philanthropic interests,” said the CEO Jonathan Shepko in a press release. “This presented us with a unique opportunity to repurchase a significant portion of our outstanding shares on very friendly terms.”

The deal is essentially carried out without a premium. The company is paying $6 per share for the former chairman’s nearly 18 million shares.

Shares of Daseke (NASDAQ: DSKE) closed at $5.97 on Friday. The volume-weighted average price over the last 30 days was $5.95 at the time. The stock peaked at more than $12 a share in early March, just as the spot market for dry vans was tipping over.

The transaction also allows the carrier to avoid buying shares on the open market.

“Reallocating capital earmarked for a share buyback in the open market to support that buyback has placed us in an excellent position to secure what we believe to be a highly attractive buyback price in a single transaction, excluding our tradable float to incriminate,” Shepko continued. “For the foreseeable future, our priority will now be to continue our trend of deleveraging our business.”

Net debt increases $40 million to $490 million, 2.1 times adjusted earnings before interest, taxes, depreciation and amortization compared to 1.9 times at the end of the third quarter.

The preference shares are divided into two tranches. The first tranche of $20 million will pay a cash dividend of 13% and the second tranche of $47.6 million will pay a cash dividend of 7%.

“We believe this transaction clearly demonstrates our confidence in the Company’s operating model and our firm belief that the Company will continue to successfully execute on its transformational strategy, all poised to generate significant future value for our shareholders,” said the Chairman Chuck Serianni.

Daseke is a coalition of flatbed vans that has made more than 20 acquisitions since it was founded by namesake Don Daseke in 2009. Starting with a fleet of 60 tractors generating $30 million in sales, the company has grown to more than 4,800 units producing over $1.5 billion in sales annually.

Daseke retired from day-to-day operations at the company in 2019 amid a restructuring and efficiency improvement plan that is still delivering results today.

“Mr. Daseke laid the foundation for something truly special at Daseke, and we are grateful for his vision and years of service. We wish him well as he moves into the next phase of his life and focuses on carrying his legacy through to expand his charitable giving,” concluded Serianni.

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