Merger & Acquisition Insights

4 Trucking Deals Closing in Next 45 Days. Why?

Posted on July 28, 2020 by admin

Over the past 4 months, almost every trucking company has been affected in some way by the many challenges our nation is facing. Deal activity is extremely high, but maybe not for the reason you might think. Here are three reasons.

  1. Crisis has demonstrated the need to diversify.

Many buyers have expanded their growth via acquisition objectives to include diversification. If Covid has done anything, it has shown us how exposed we are when we have all of our business value tied to one industry segment. For example. We have a refrigerated carrier telling us to find them dry van haulers as quickly as possible because the feel over exposed right now.

  1. Crisis has crystallized purpose and accelerated necessary action.

Many companies understood, prior to Covid, that the path to profitability is only becoming more difficult in trucking. Without scale, it is difficult to make the numbers work. Covid gave trucking firms the permission to boldly respond to pre-existing challenges via acquisition.

  1. The disruptions in the capital markets have made some companies more “bankable,” and therefore, more valuable.

Covid has made getting deals done through Cash Flow Lenders more complicated. It has also allowed Asset Based Lenders to aggressively step in that gap to stand as an important piece of the deal puzzle. Smaller deals that may not have had an eager audience 6 months ago are getting attention because the certainty of close is high and speed of potential acquisition impact is also high.

None of these companies are distressed.  They are just seeing this as the time to protect the value they have worked hard to create. Similarly, buyers are seeing this as an opportunity to accelerate growth and to make a transformational impact on the business.  What’s ahead for your business?

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