Offering presents opportunity to expand into the trucking industry with an established presence from coast to coast.
Equity Fund client is offering a majority or full interest in this structured roll-up. The preferred transaction would include all, or the larger number of, the companies that comprise the roll-up.
On offer is a roll-up of transportation and logistics companies based in the United States that collectively have approximately $150,000,000 in annual revenue; adjusted EBITDA of $16,500,000; total assets book value of $60,000,000; and total liabilities of $43,000,000. The group has established presences in the Northeast, Midwest, Northwest and Southeast areas of the U.S. in addition to key relationships with both Canada and the United Kingdom. Freight capabilities range from general commodities, bulk commodities and machine transport. The roll-up centers on companies with strong management, potential to grow revenues and profits with a capital infusion, and companies whose current business model could be expanded further throughout the U.S.
In an industry where a stellar reputation and safety record are paramount, the experience and track record of these companies is not easily nor quickly replicated by new players entering the market. Barriers to entry are high for inexperienced outfits. In the mature market of bulk transport for example, the players are well-known and long-term relationships are an important part of this business. A large sales force and marketing effort would be required to replicate such a presence. Another barrier to entry for inexperienced companies is that pricing in the industry is very complicated. Over the years the companies which comprise this roll-up have outlasted young competitors entering the marketplace. What the newer companies find is that without a track record they are beholden to lower their prices and eventually learn that approach is simply not sustainable. The difficulty of a new company ...