DB Schenker, the third-largest logistics provider in the world by revenue and a division of the national railway company of Germany, has agreed to acquire truckload carrier USA Truck in an all-stock transaction as it seeks to accelerate its penetration of the U.S. domestic market, the companies announced Friday.
The international supply chain giant said it will pay $31.72 per share in cash for all of USA Truck’s (NASDAQ: USAK) common stock, a 118% premium to it’s pre-deal share price of $24. The transaction values USA Truck at about $435 million, including cash and debt. Cowen investment bank said it liked the deal for USA Truck shareholders at equivalent to 12 times forward earnings, by its estimate.
The companies said they expect the deal to close by the end of the year, at which time USA Truck would become a private company.
DB Schenker officials foreshadowed a major acquisition of a U.S. motor carrier in interviews with FreightWaves early last year. The mega-3PL increased trucking service in the U.S. and Canada in 2021 by beefing up its sales force and outsourcing truck moves to other carriers that pulled DB Schenker-owned trailers. A special gold-painted truck drove across the country to visit customers and showcase DB Schenker’s capabilities.
The deal is part of a larger trend in which the lines between asset-based freight transportation companies and service-focused freight forwarders are blurring. Global logistics providers increasingly are offering more end-to-end control over transportation to ensure customers have the capacity and reliability when relying on third-party contractors has become increasingly difficult because of high demand and supply chain disruptions.
The logistics giant said it will use its resources to expand USA Truck’s footprint in North America.
The combination will enable DB Schenker to sell USA Truck customers air and ocean shipping and supply chain management services, while offering existing clients direct trucking service in the U.S. and Mexico. DB Schenker officials say their forwarding and customs brokerage expertise gives the company a natural advantage in handling cross-border trucking, which they view as a lucrative market opportunity.
USA Truck, headquartered in Van Buren, Arkansas, has posted seven consecutive quarters of record earnings and had $710 million in revenue in 2021. It has a mixed fleet of about 1,900 tractors operated by its own personnel and more than 600 independent contractors. It has 2,100 employees. The USAT Logistics division provides freight brokerage, logistics and intermodal services. The company says its customers include more than 20% of Fortune 100 companies.
“USA Truck is the perfect match for DB Schenker’s strategic ambition to expand our network in North America and foster our position as a leading global logistics provider,” said CEO Jochen Thewes. “In our 150th anniversary year, we are pleased to welcome one of the leading trucking and logistics providers to DB Schenker. Together we will enhance our shared value proposition and invest in exciting growth opportunities and sustainable logistics solutions for new and existing clients.”
DB Schenker, with gross sales of more than $20.7 billion, has more than 76,000 employees at more than 1,850 locations in 130 countries. It operates a large less-than-truckload network in Europe. The company manages more than 27 million square feet of distribution space in the Americas.
There are many recent examples of global freight transportation companies expanding into forwarding and logistics, including ocean shipping giant Maersk, which has recently bought last-mile e-commerce delivery companies and an airfreight forwarder and begun using its in-house air cargo airline for its own customers, not just functioning as a contract carrier for express delivery companies. Another container line, CMA CGM, also started an air cargo airline last year and has acquired several major logistics companies in the past four years.
USA Truck’s board of directors unanimously approved the sale to DB Schenker, which is subject to regulatory review and other customary closing conditions, including the approval of USA Truck shareholders.