Flatbed operator goes into a company increasingly viewed by Wall Street as an LTL carrier
Flatbed operator Daseke ended its history as an independent trucking company Monday when its acquisition by Canada’s TFI International closed for $1.1 billion.
The acquisition by TFI (NYSE: TFII) was announced Dec. 22. The share price for the acquisition was $8.30, after closing at $4.91 on Dec. 21.
Daseke reported revenue of $1.57 billion in 2023. In 2016, revenue was $651.8 million.
The disappearance of Daseke from the list of publicly traded carriers follows that of such companies as U.S. Xpress and USA Truck, as well as nontrucking companies whose public earnings provided a window into the strength or weakness of the business. Those include Travel Centers of America and Echo Global Logistics, which stopped trading as public companies when they were acquired by others.
The count on Daseke’s operations as reported in its final 10-K filing with the Securities and Exchange Commission is that its Flatbed Solutions segment had 2,339 tractors and 2,849 trailers. The Specialized Solutions segment, which the company described as focused on “delivering transportation and logistics solutions that require the use of specialized trailering transportation equipment,” had 2,430 tractors and 6,820 trailers. Although Daseke was known primarily for its flatbed operations, the Flatbed Solutions segment provided only 41% of the company’s revenue, with Specialized Solutions supplying the balance.
Last year, company and owner-operator drivers drove 388.2 million miles, according to the 10-K.
For TFI, the acquisition of Daseke is its second in less than a month. It announced the acquisition of less-than-truckload carrier Hercules Forwarding March 11.
TFI’s acquisitions in recent years have skewed toward LTL, enough that most equity analysts who follow TFI now see it as an LTL rather than truckload carrier. And at the time the Daseke deal was announced, CEO Alain Bédard said a split between the truckload operations of TFI and the LTL and other lesser-mile operations was under consideration.
“This acquisition also advances our strategic consideration of creating a unique opportunity for shareholders to separately invest in a specialized truckload business and in an LTL [package and courier] and Logistics business,” Bédard said. “Our immediate focus will be on improving Daseke’s financial results, with the strategic consideration to follow and be ongoing.”
In late January, Deutsche Bank initiated coverage on TFI. “We view the LTL industry as one of the most attractive investment areas across all industrials, reflecting the consolidated nature of the market and resulting pricing power,” Deutsche Bank said in its rationale for initiating coverage. “We think a rising tide will lift all boats, and with TFII trading at a notable valuation discount to the group, we have confidence in double digit gains.”
In announcing the closing of the deal, TFI also said it had closed on a $500 million term loan that it described as “oversubscribed.” The three tranches in the loan are $100 million maturing in March 2025, $100 million maturing in March 2026 and $300 million maturing in March 2027.