Valuations for trucking companies

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by a searcher
in Dickinson, TX 77539, USA

4yrs ago

Valuations for trucking companies

Can someone tell me what the valuations are for trucking companies with owner operators, and company owned trucks? How are the trucks valued now that truck prices have increased, and fuel has skyrocketed?

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reply by a searcher 4yrs ago
from The University of Arizona in Denver, CO, USA

With owner operators and owned trucks, focus on Cash Flow. Trucks should be replaced every 4-5 years, bought new and cycled out, assuming long haul 80k+ miles per year, and will cost $150-175k to replace (assuming basic tractors). Do some quick math on the truck fleet to understand maintenance capital. Trailers every 20 years (assuming basic dry and reefer). Take the EBITDA - Maint CapX = Cash Flow number by 6-8x at most. The typical result is 4-5x on EBITDA, assuming they make decent margins and are of size or scale. This is for trucking companies in the $3-5m of cash flow range which are hauling commoditized goods and don't have any particularly special "trick". Less than than, take 0.5x-1.0x off the multiples. Happy to chat more on it.

The only transport businesses that would trade above that are anything of major size and scale ($20m+ of EBITDA = $10m+ of CF) with some kind of "trick" or completely asset light businesses (no company owned or O/Os or trailers). Everything else likely falls in between.

reply by a searcher 1yr ago
from University of Texas in United States

Hey ^redacted‌ -- This was from a while back, but it would be great to get your opinion on the space in today's environment. I am in the final stages of a trucking deal right now, it would be great to connect. Please let me know if you have some time.