Economic Signs Point to Logistics Acquisitions

Economic Signs Point to Logistics Acquisitions

A wave of acquisitions could hit the U.S. trucking and logistics industries in 2011 as the economy slowly improves and cramped companies look to expand.

The more successful transportation and logistics operators and private equity investors will be looking to expand by acquisition, a financial executive said.

"There's a lot of pent-up financial capital sitting on the sidelines that people want to use," said Chris Wofford, head of transportation and logistics at Macquarie Capital.

Wofford helped arrange one of the largest logistics mergers in several years in 2010, the $512.6 million purchase of ATC by GENCO Supply Chain Solutions.

"We had a window of a couple of years (during the recession) where nothing much was going on," Wofford said. "We're back to a more ordinary environment."

The fourth quarter of 2010 saw several acquisitions in trucking and logistics, as smaller operators regained enough revenue and profit to attract buyers.

Those deals ranged from Continental Express' purchase of 15-truck Carolina Refrigerated -- to TransForce's takeover of Dynamex, a $407 million carrier.

Acquisitions helped logistics and trucking operator NFI survive the recession and position it to grow in 2011, said Chief Executive Officer Sidney Brown.

The company tripled its annual revenue over the past decade to $900 million in 2010 while completing nine acquisitions, Brown said in a statement.

Last year, Cherry Hill, N.J.-based NFI acquired Canadian logistics firm IPD Global to expand its perishable transportation business across North America.

The company's acquisition targets over the past decade included regional truckload carriers, warehouse and logistics operators and a contract packaging business.

Macquarie's Wofford said strategic goals, rather than purely financial targets, will drive mergers and acquisitions in 2011, "where there's a good industrial fit."

-- Contact William B. Cassidy at wcassidy@joc.com.