Trucking Company Acquisition Questions

searcher profile

October 20, 2023

by a searcher from The University of Chicago - Booth School of Business in Woodinville, WA, USA

Question: Has anyone on here ever purchased a trucking or logistics company?

Currently in conversations with one and would love to understand:
1)Union Challenges - If you had challenges with union, how was the withdrawal liability addressed, did you renegotiate the CBA?
2)Asset vs Stock sale: I get the difference, but wanted to know the best path for trucking. Specifically, you would need to get a new DOT number, your insurance goes up, may risk disruption in service and inspections, which could trigger additional expenses. How much of a headache is this?
3)Net Working Capital - tractors and tailers are not cheap, how did you come up with the right NWC knowing that you will not be able to take out loans the next 2 years. Is there a standard formula that is industry accepted?
4)What multiple did you end up paying on EBITDA?
5)Any other warts that were uncovered that you wish you thought of prior to purchase?
Would love to chat thru these. Thanks in advance.

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commentor profile
Reply by a searcher
from Ivey Business School at Western University in Toronto, ON, Canada
Horrible time to acquire one of these assets IMO. We’re in a trucking recession. Spot rates down considerably yet costs to operate remain elevated. Unknown end in site - it’s a black box. That’s a ton of uncertainty to underwrite. Surely there are more attractive industries to pursue.
commentor profile
Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
Regardless of the industry if you purse a Union shop, surround yourself with a deal team that truly understands the numerous nuances, especially for change of ownership. Attorney CPA and lender that specialize in union shops. They’re going to be hard to find.
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