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USA Truck is being acquired by DB Schenker in a $435 million deal announced June 24.
Under the terms of the deal, DB Schenker is acquiring all outstanding common stock in USA Truck. All USA Truck cash and debt is also included in the price. The stock being acquired is valued at $31.72 per share. The USA Truck board of directors unanimously approved the deal.
DB Schenker is a logistics-focused division of German rail operator Deutsche Bahn. The company operates land, air and ocean transportation services as well as logistics and global supply chain management solutions.
A freight truck operated by DB Schenker stands at the Port of Helsinki in Finland. (Ville Mannikko/Bloomberg News)
“USA Truck is the perfect match for DB Schenker’s strategic ambition to expand our network in North America and foster our position as a leading global logistics provider,” DB Schenker CEO Jochen Thewes said. “We are pleased to welcome one of the leading trucking and logistics providers to DB Schenker. Together, we will enhance our shared value proposition and invest in exciting growth opportunities and sustainable logistics solutions for new and existing clients.”
The transaction is subject to regulatory reviews and approvals and the satisfaction of other customary closing conditions, USA Truck stockholder approval being among them. The parties involved expect the completion of the transaction by the end of the year. USA Truck will become a private company once that occurs and delist from Nasdaq Global Select Market.
“We are thrilled to have found a partner that appreciates USA Truck’s rich history, is closely aligned with our mission and values, and brings additional resources that we believe enable us to build on our nearly 40-year legacy of industry leadership,” USA Truck CEO James Reed said. “This transaction provides immediate and significant value for USA Truck stockholders, offers broadened career opportunities for our employees and increased capacity and service offerings with which to support our customers, and better positions our company to realize our long-term vision to become the premier North American transportation solutions provider.”
DB Schenker aims to strengthen and expand the presence of USA Truck in North America. The company also intends to expand its global logistics services across land, air and ocean transportation services by building upon American and Mexican freight networks it gained in the deal.
We are proud to announce an agreement under which we will acquire all outstanding shares of @USATruck_Inc – a strong combination with a shared vision to become the premier North American transportation solutions provider! https://t.co/YvRWuJHtEj #USATruck #DBSchenker
— DB Schenker (@DBSchenker) June 24, 2022
“This transaction recognizes the culture of excellence James, his team and all of our dedicated employees have created and commit to every day at USA Truck,” said Alexander Greene, chairman of the board at USA Truck. “It rewards our stockholders for their unwavering support during our turnaround and through the pandemic, and offers further opportunity for our customers to draw upon USA Truck’s strengths utilizing the resources and reach of one of the world’s leading logistics services organizations.”
USA Truck, in turn, will be in a better position to benefit its existing customer base through added international logistics expertise, air transport services and ocean gateways. DB Schenker has a notable global presence that can be leveraged with more than 76,000 employees at more than 1,850 locations in over 130 countries. That includes 10,000 employees in 123 locations already located in the Americas.
“USA Truck’s success has been driven by their impressive employees — all of whom are critical to future growth — and we look forward to welcoming them as an integral part of our team,” said Joe Jaska, executive vice president of land transport for the Americas region at DB Schenker. “As part of a larger organization with DB Schenker, USA Truck employees will have access to career opportunities at both the local and global level. We view this transaction as a platform for growth and by combining these organizations, we will greatly enhance our presence in the North American land transport space.”
Cowen and Co. noted in a brief that the deal implies a 118% premium to the share price prior to the announcement. The financial services company doesn’t foresee any challenges associated with regulatory approval. The transaction is being valued at about 12 times its conservative earnings estimate for 2023.
“Based on our previous $24 price target for USAK, we see this as a great deal for USAK shareholders and are encouraged to see USAK get credit for its strong performance and logistics initiatives,” Cowen analyst Jason Seidl wrote in the brief. “We are encouraged to see a likely successful sale of USAK shares given the market has continued to discount the company compared to its TL peer group.”
Evercore is serving as financial adviser and Scudder Law Firm is serving as legal counsel for USA Truck. Morgan Stanley & Co. is the financial adviser and Latham & Watkins is acting as legal counsel for DB Schenker.
USA Truck ranks No. 57 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
DB Schenker (North America) ranks No. 24 on the TT Top 100 list of the largest logistics companies in North America. — Transport Topics
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