Acquisition adds non-asset carrier to portfolio that includes $1.7 billion ABF Freight System
Arkansas Best, parent of less-than-truckload operator ABF Freight System, is acquiring non-asset carrier Panther Expedited Services for $180 million.
The transaction, possibly the largest trucking acquisition in a year of accelerated merger activity, is expected to close June 14, the companies said.
The acquisition gives $1.9 billion Arkansas Best a presence in the non-asset expedited logistics arena, a new fast-growing market for the holding company.
Panther, a $215 million company, offers on-demand expedited transportation in the U.S. and worldwide. It’s a fast-growing field fueled by lean supply chains.
The Seville, Ohio-based company is the second-largest expedited carrier in the U.S., after FedEx Custom Critical, according to data from SJ Consulting Group.
That data indicates Panther increased its expedited revenue about 5 percent in 2011, while the total top five expedited carriers increased combined expedited revenue 9.3 percent.
Panther Expedited is an “excellent strategic fit” for Arkansas Best as it works to offer end-to-end logistics solutions, said President and CEO Judy R. McReynolds.
“We are very enthusiastic about this unique transaction, which met all of our criteria for growth among many options we analyzed for several years,” she said.
The acquisition will push the Fort Smith, Ark.-based holding company beyond the $2 billion revenue mark in 2012 and accelerate Arkansas Best’s diversification.
“With Panther operating as a sister company to ABF Freight, our core LTL business, we are better positioned to serve as a premier one-source logistics partner.”
The acquisition combines two radically different types of transport operator in one portfolio.
ABF is a unionized carrier with about 10,000 employees, mostly Teamsters, that moves palletized freight on a scheduled basis through its terminal network.
The carrier, founded in 1923, is the sixth-largest U.S. LTL carrier, according to SJ Consulting Group data, ranked just below Old Dominion Freight Line.
Panther, founded in 1992, provides door-to-door service through a network of 5,000 ground and air line-haul carriers, all independent contractors.
Both companies are struggling to maintain profitability in the wake of the recession.
Last year, ABF Freight reported a $4.7 million operating profit on $1.73 billion in revenue, but the carrier lost $22 million in the first quarter of 2012.
Panther lost $3.4 million in 2011, with adjusted earnings before interest, taxes and other charges of $23.5 million, according to data released by the companies.
Full Story at The Journal of Commerce (joc.com)
Contact William B. Cassidy at [email protected]. Follow him on Twitter at @wbcassidy_joc