Werner Enterprises announced Monday that it has acquired freight broker ReedTMS Logistics for $112.4 million. The deal also included a small dedicated airline.
The purchase price includes a maximum earnout of $7.5 million, subject to 2023 results.
Tampa, Fla.-based ReedTMS generated revenue of $372 million across the two companies for the 12-month period ended September 30. Ninety percent of revenue in the combined portfolio comes from the truckload and freight brokerage platform, which has 70,000 carriers, 19,000 of which 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. His top 10 accounts have been active with the broker for an average of eight years. Brokerage earnings on the platform are 65% contractual with the other 35% tied to the spot market.
A margin profile for the company was not provided, but the press release said the deal is expected to be profitable 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%.
|acquisition course||$112.4M, Earnout of up to $7.5M|
|ReedTMS revenue run rate||$372 million|
|Werner’s Revenue Run Rate||$2.7 billion|
|profit expectations||value-adding in the first year|
|Recent acquisitions by Werner||Baylor Trucking, Nehds Logistics, ECM Transport Group|
“ReedTMS Logistics continues to strengthen our capabilities in the freight brokerage business,” said Derek Leathers, Chairman, President and CEO of Werner. “ReedTMS will add new customers to our logistics portfolio by expanding and diversifying our industry verticals.”
ReedTMS will remain a standalone operation with its management team, drivers and bareboat employees continuing to operate under the current banner.
The acquisition is the fourth deal Werner has completed since Leathers took over as chairman. In July 2021, the company acquired ECM Transport, a fleet of 500 trucks, for $142 million. Nearly a year ago it added last-mile carrier Nehds Logistics in a $64 million deal, and last month it 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 host a conference call at 2:00 p.m. Monday to discuss the transaction.
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