Werner Enterprises announced Monday that it has acquired freight forwarder ReedTMS Logistics for $112.4 million. The deal also includes a small dedicated van.
The purchase price includes a maximum gain of $7.5 million, contingent on 2023 results.
Based in Tampa, Fla., ReedTMS generated revenue of $372 million through the two companies for the 12 months ended September 30. Ninety percent of the combined portfolio’s revenue comes from the truckloading and freight brokerage platform, which includes 70,000 carriers, of which 19,000 are considered active.
According to a press release, the company has grown its revenue at a compound annual growth rate of 28% over the past five years.
Founded in 1996, ReedTMS has more than 800 customers, two thirds of which are in the food and beverage industry. Their top 10 accounts have been with the broker for an average of eight years. The platform’s brokerage revenues are 65% contractual and the remaining 35% tied to the spot market.
A margin profile for the company was not provided, but the statement said the transaction is expected to be positive for earnings in the first year. Werner’s logistics segment generated revenue of $765 million for the recently reported 12-month period with an adjusted operating margin of 5.2%.
|The buying price||$112.4 million, with earnings up to $7.5 million.|
|ReedTMS Income||$372 million|
|Werner’s income||$2.7 billion|
|profit expectations||additionally in the first year|
|Recent Werner acquisitions||Baylor Trucking, Nehds Logistics, ECM Transport Group|
Table: company reports
“ReedTMS Logistics continues to strengthen our freight brokerage capabilities,” said Derek Leathers, President and CEO of Werner. “ReedTMS will add new customers to our logistics portfolio and expand and diversify our industry verticals.”
ReedTMS will remain an independent operation, with its management team, drivers and non-driver employees continuing to operate under the current banner.
This acquisition is Werner’s fourth transaction since Leathers became president. In July 2021, it acquired ECM Transport, a fleet of 500 trucks, for $142 million. It added last-mile carrier Nehds Logistics in a $64 million deal nearly a year ago, and last month acquired Baylor Trucking and its 200 trucks for an undisclosed price.
“Werner will enable us to achieve important goals, including creating broader opportunities for our people, expanding our service capabilities to our customers, and supporting our quest to leverage best-in-class technology solutions for our employees, customers, suppliers and other stakeholders,” said Jason Reed, CEO of ReedTMS.
Werner will set up a conference call at 2:00 p.m. Monday to discuss the transaction.