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M&A Space for Trucking and Logistics Providers is Booming

David Marcus
Tatjana Kulkarni
9/18/14 5:14 PM EDT
There are a number of reasons for the uptick in M&A in trucking and logistics. First, the industries which these companies are most dependent on, such as construction, housing, and energy are picking up if not already active, so there’s more demand for cheaper and more efficient transportation. Second, trucking companies want to increase their routes, and acquisitions are the best way to do that. An often overlooked factor is the need for drivers. Companies would rather have a reliable pool of drivers who receive stable pay than have to find the right drivers for the right process every time they have to make a shipment. The market is very fragmented. So there a lot of smaller companies looking to be acquired for the right price, as well as larger players searching for targets. We’re seeing a lot of the larger players doing the buying. There’s XPO Logistics, for example. Bradley Jacobs has explicitly said he wants to make acquisitions and the company has the $700 million in capital to back that desire. Just yesterday, TransForce made a $461 million proposal to acquire its rival Contrans Group Inc.

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