Roadrunner Transportation Systems has acquired all of the outstanding equity of G.W. Palmer Logistics for about $2.5 million, plus an earn-out capped at $2.8 million.
The acquisition of G.W. Palmer Logistics, a non-asset truckload service provider based in Batesville, Ark., was financed with borrowings under Roadrunner’s credit facility. G.W. Palmer is expected to be accretive to Roadrunner’s earnings in the near term. Roadrunner’s profit and revenue soared in the second quarter of 2013, boosted by other recent acquisitions.
“The G.W. Palmer acquisition enhances our truckload service offering in the South due to its concentration in temperature controlled products,” said Mark DiBlasi, president and CEO of Roadrunner, No. 15 on JOC’s list of the Top 25 Less-Than-Truckload Carriers, in a written statement. “G.W. Palmer’s management team will remain in place and are excited about the growth opportunities we collectively envision.”
Roadrunner recently announced a public offer of 4.3 million shares of common stock, consisting of 1.5 million primary shares and 2.8 million secondary shares from selling stockholders. The deal supports Roadrunner’s acquisition strategy, such as the acquisitions of TA Drayage in August and Wando Trucking and Adrian Carriers in May, according to Stifel Nicolaus.
Excluding Roadrunner because of its acquisition-related changes, LTL carriers’ yields have been deteriorating since the third quarter of 2011, with average yields in the third quarter of 2013 up “only” 1.2 percent year-over-year, the weakest results since the first quarter of 2010, Stifel Nicolaus said.