Transportation & Logistics - G2 Capital Advisorsg2capitaladvisors.com/wp-content/uploads/2018/03/TL-Q3-2017.pdf · Logistics Dedicated (Pending) –J.B. Hunt, trucking and intermodal

Transportation & LogisticsStrategic Market Insights – Q3 2017 Report

www.g2cap.com 2

The Transportation & Logistics industry continues to evolve around e-commerce and fulfillment needs of

consumer demand. As the expected fulfillment timeframe of products shortens with Amazon’s

aggressive hourly deliveries, industry players are looking to decrease operational costs and increase

overall efficiencies to compete. Industry consolidation and strategic M&A activity has picked up,

particularly within the final mile and freight forwarding segments. Additionally, new technology within the

Trucking subsector, such as virtual reality and vehicle to vehicle software, has emerged to augment or

replace traditional means of training and fleet management. Larger industry players like UPS, have

taken the lead in technological improvement, implementing virtual reality and route optimization

software. The industry can expect such technological advancements to be commercially available over

the next few quarters.

Transportation & LogisticsG2 Insights – Sector Summary

The Transportation & Logistics industry continues to evolve to meet the growing demands of the

persisting e-commerce boom. Below are G2’s insights and observations:

FY 20171 LTM2

Sector

Number of

Selected

Companies

Median

Enterprise Value

(MM)

Median

Revenue

Growth

Median

EBITDA

Growth

EV /

Revenue

EV /

EBITDA

Logistics 19 4,060 7.9% 13.6% 1.0x 11.4x

Marine 17 3,104 -1.6% -12.8% 1.4x 9.3x

Rail Services 11 14,201 4.5% 6.3% 1.8x 9.3x

Trucking 18 1,173 4.3% 1.4% 1.0x 7.5x

Sector Summary in Millions USD (converted where necessary)

Data sourced from S&P Capital IQ on September 30, 2017

1 Compared with values at September 30, 20162 LTM Multiples as of September 30, 2017

The total T&L M&A transaction volume through the third quarter of 2017 has seen a dip in volume but

deal value remains consistent. High competition from both strategic and financial acquirers in

conjunction with a supportive financing environment has led valuations to remain strong, particularly in

the middle market. The current atmosphere has formed a “seller’s market” with vast amounts of capital

chasing a limited amount of desirable acquisition targets. The summary table below references select

public companies identified for each of the industry’s key segments: Logistics, Marine, Rail Services,

and Trucking. Public valuations range from ~8x EBITDA for Trucking companies to ~12x EBITDA for

Logistics providers. The Marine sector lags behind at ~8x EBITDA with YoY decreases in profitability

and revenues.

Sector Summary

www.g2cap.com 3

Transportation & Logistics

Companies continue to shift operational focus to take advantage of technology enablement and

become increasingly lean, efficient, flexible, and accurate.

Final Mile Delivery – Amazon’s acquisition of Whole Foods will push other retailers to accelerate the

development and rollout of their final mile delivery and omni-channel fulfillment services. Whole

Foods’ hundreds of locations enable Amazon to extend its same-day and hourly (within one or two

hours) fulfillment capabilities into the Grocery and Fresh Foods industry. Competitors, such as Stop

& Shop’s Peapod delivery, will feel increasingly pressured to speed up their delivery times to

compete. Signs of consolidation and acquisition strategies within the sector have begun as

Walmart, acquired last-mile delivery startup, Parcel Inc., on October 22 to better serve customer

demand for fresh groceries, accounting for 56% of annual revenues. On August 14, retailer giant

Target acquired the transportation technology company, Grand Junction to augment its next-day

delivery pilot program set to take place in New York’s Tribeca neighborhood next year.

Route Optimization – A growing number of companies are investing in the development of

sophisticated route optimization software and technology. Route optimization software instantly

aggregates and analyzes a wide range of both historical and real-time traffic, weather, route pick-

up, and drop-off data. By setting parameters to optimize both speed, efficiency, and even mileage,

the driver can both efficiently fulfill delivery demands and reduce operational costs. UPS recently

finished its pilot test of its ORION United States route optimization algorithms and is currently

working to implement and roll out its software to other international markets.

Virtual Reality for Driver Training – The Virtual Reality trend has transcended traditional video game

and entertainment purposes and entered the transportation and logistics space. In August, UPS

announced that it would start using virtual reality (VR) technology to train drivers to better identify

and spot road hazards throughout their delivery routes. According to UPS, this new VR training

module allows drivers to simulate the real experience of driving in urban settings, and as a result,

better protect its on-road employees and the general public. UPS has incorporated this VR training

to nine UPS Integrad training facilities in the U.S. and Europe since September.

Drone Delivery in E-Commerce – The personal and commercial drone market is expected to report

revenues of at least $6 billion in 2017 and is expected to hit $11 billion by 2020. Though majorly

publicized by Amazon’s pilot launch in December of 2016, over 20 drone delivery-related

companies have emerged over recent years. Retailers are eager to embrace the out-of-the-box

delivery medium as a recent study revealed 42% of manufacturers and retailers are in favor of

integrating logistics services with driverless vehicles.

G2 Insights – Emerging Industry Trends

Figure 1 – A UPS driver in the Integrad program using its new virtual reality training system for on-

the-road readiness.

Source: Transportation Topics, SupplyChainDive, SupplyChain24/7. CEI.org, Truckinginfo.com

www.g2cap.com 4


Truck Platooning – The emergence of truck platooning software, developed by companies like

Peloton Technology, allows multiple trucks to autonomously travel in convoys for enhanced fuel

efficiency. Through direct Vehicle to Vehicle (V2V) communications, platooning trucks accelerate

and brake together, reducing overall wind resistance. This in turn boosts the truck’s fuel efficiency,

reducing the primary costs for trucking fleets. As the convoy’s lead truck alternates in its position

throughout the haul, fuel efficiency can be distributed throughout the fleet. Once this technology is

fully commercialized to reach the market, the cost-advantage will draw significant demand from

truck operators. Peloton plans to release a limited number of commercial platooning software

licenses at the end of 2017, with a full product launch in 2018.

Hydrogen Fuel-Cell Trucks – This fall, Toyota announced its initial testing of its Project Portal Class

8 hydrogen fuel-cell trucks for drayage duty-cycle capabilities. Toyota unveiled its plan to build a

hydrogen fuel-cell truck that generated more than 670 horsepower with a 12kWh battery last April.

Hydrogen fuel-cell energy uses compressed hydrogen as a fuel source and releases water vapor as

an emission. Development of the technology spans over the last decade but has not taken off due to

severe shortages of fueling stations. However, experts predict commercial trucks will benefit more

from hydrogen in the future thanks to easy access to convenient industrial fueling stations at

warehouses or ports.

Laws Regulating Self-Driving on the Horizon – The American Vision for Safer Transportation

Through Advancement of Revolutionary Technologies Act and SELF DRIVE Act both advanced in

the Senate and House with bipartisan support. Both bills permit manufacturers to apply for

exemptions to federal vehicle safety standards in order to sell self-driving vehicles that may lack

conventional equipment, such as steering wheels and pedals. Both bills, however, maintain the

status quo for commercial trucks and buses, as labor unions, including the International

Brotherhood of Teamsters, lobbied hard to keep them out of self-driving bills. The main concern

over the application of driverless technology in commercial trucks is the potential threat to jobs in

the Transportation & Logistics Industry. It is estimated that up to three million commercial trucking

jobs could be at risk if self-driving vehicles replace human drivers.

G2 Insights – Emerging Industry Trends (continued)

Figure 2 – A Peloton Technology screenshot portraying the fuel efficiency gained from reducing

track by platooning throughout trucking fleets.

Source: Transportation Topics, SupplyChainDive, SupplyChain24/7. CEI.org, Truckinginfo.com

www.g2cap.com 5

Odyssey Logistics & Technology Corporation to acquire The Jordan Company (Pending) –

Announced on 8/30/2017, The Jordan Company has signed a definitive agreement to become a

new majority shareholder in Odyssey Logistics & Technology Corporation, a global logistics

solutions provider with intermodal, trucking, and managed services. Terms of the deal were not

disclosed. In addition to its pending investment of Odyssey, The Jordan Company, a private equity

firm with capital commitments exceeding $8B, owns American Fast Fright, an ocean freight

forwarder, and Quick, a mission-critical logistics firm.

J.B. Hunt Transportation (Nasdaq:JBH) to acquire Special Dispatch of San Antonio and Special

Logistics Dedicated (Pending) – J.B. Hunt, trucking and intermodal logistics provider, announced its

acquisition of Special Logistics Dedicated and Special Dispatch of San Antonio, providers of

dedicated sites, cross-docking and contract logistics, LTL, and dry van services. J.B. Hunt

referenced the acquisition as an opportunity to improve its final mile and e-commerce fulfillment and

delivery capabilities. The transaction value is expected to be $136MM.

United Road Services acquired by The Carlyle Group (September 2017) – United Road Services, a

provider of vehicle transportation and logistics in North America, was acquired by global asset

manager, The Carlyle Group from private equity group Charlesbank Capital Partners. The Carlyle

Group cited United Road’s strong growth over recent years as an important motive behind the

acquisition. Terms of the deal were not disclosed.

Celadon Group’s (NYSE:CGI) Flatbed Trucking Division acquired by PS Logistics (September

2017) – Celadon Group Inc. (NYSE:CGI) divested its Flatbed Trucking Division to PS Logistics, a

flatbed/heavy specialized logistics service provider. Celadon’s Flatbed Trucking Division generated

about $20MM in revenues in 2016 while PS Logistics logged approximately $495MM in revenues in

its flatbed/heavy operations. Though the terms of the transaction were not disclosed, it marks an

important point of industry consolidation within the flatbed subsector and a shift in strategy for

Celadon Group.

Milgram & Company acquired by C.H. Robinson Worldwide (August 2017) – C.H. Robinson, a

leading global third party logistics provider acquired Milgram & Company, a provider of freight

forwarding, customs brokerage, and surface transportation in Canada, on Aug. 31 for $62MM CAD

(~$50MM USD). Milgram posted approximately $124MM USD in revenues in 05/31/2017. The

acquisition allows C.H. Robinson to expand its North American presence by securing a Canadian-

based forwarder as well as provide expertise and additional resources for Milgram’s future growth.

United Global Logistics acquired by RoadOne IntermodaLogistics (August 2017) – RoadOne

IntermodaLogistics, an intermodal, distribution, and logistics service company acquired United

Global Logistics, a Chicago-based intermodal transportation company. With this acquisition

RoadOne is able to expand its capacity, improve its customer service, integrate and augment

existing technology, and acquire new service offerings.

Transportation & LogisticsSelected Industry Deals Q3 2017

Several notable transactions have already been completed or announced in the Transportation &

Logistics industry through Q3 2017. G2 has outlined select transactions below, followed by a more

comprehensive list on the following tables.

Source: Transportation Topics, S&P Capital IQ

www.g2cap.com 6


Marine

Recent Select Deal Activity – Pending & Closed

Date Closed Target Acquirer / Investor

Sep-17 Euromar LLC Euroseas Ltd.

Aug-17 Gardline Shipping Limited Royal Boskalis Westminster N.V.

Aug-17 Marenave Schiffahrts AG Ernst Russ AG

Aug-17 Astarte International Inc. Top Ships Inc.

Trucking


Sep-17Celadon Group, Inc., Substantially All Assets of

Flatbed Trucking DivisionPS Logistics LLC

Sep-17 Penske Truck Leasing Co., L.P.Penske Automotive Group, Inc.; MBK USA Commercial

Vehicles Inc.

Sep-17 Garrett Bros., Inc. Tenaris S.A.

Sep-17R & R Trucking, Inc. and TNI USA Inc. and NEI

Transport LLCDaseke, Inc.

Sep-17 RDK Transportation Co. Inc. Mullen Group Ltd.

Aug-17 Milgram & Company Ltd. C.H. Robinson Worldwide, Inc.

Aug-17 Stella Environmental Services, LLC Hidden Harbor Capital Partners, LLC

Jul-17 R.E.M Transport Ltd. Jardine Transport Ltd.

Jul-17 Interstate Distributor Co., Inc. Heartland Express, Inc.

Jul-17 Steelman Transportation, Inc. and Group One Inc. Daseke, Inc.




Pending Odyssey Logistics & Technology Corporation The Jordan Company, L.P.

PendingSpecial Dispatch of San Antonio, Inc. and Special

Logistics Dedicated, LLCJ.B. Hunt Transport Services, Inc.

Sep-17 Sandifer-Valley Transportation and Logistics, Ltd. Radiant Logistics, Inc.

Sep-17 United Road Services, Inc.The Carlyle Group L.P.; Carlyle US Equity Opportunity Fund

II, L.P

Sep-17 Unitrans, Inc. Quick International Courier, Inc.

Aug-17 MacroPoint LLC The Descartes Systems Group Inc.

Aug-17 United Global Logistics Inc. RoadOne, Inc.

Aug-17 Professional Freight Solutions, Inc. Aerostar Global Logistics, Inc.

Jul-17 IDEAL Logistic Inc. Transport Guilbault Inc

Jul-17 Grand Worldwide Logistics Corporation American Fast Freight, Inc.

Logistics

Rail ServicesDate Closed Target Acquirer / Investor

Pending Nuovo Trasporto Viaggiatori SpA Undisclosed

Aug-17 Locomore GmbH & Co. KG LEO Express a.s.

Aug-17 Trans Eurasia Logistics GmbH DB Cargo AG

www.g2cap.com 7

Transportation & LogisticsPublic Trading Metrics – Logistics


Charts show average daily multiples for each year


1.0x

0.8x0.6x

0.8x 0.8x 0.8x0.9x

1.0x 1.0x0.9x

1.0x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

EV

/ T

OT

AL

RE

VE

NU

E S&P 50010.6x

8.5x

7.0x

9.8x9.1x

8.7x

10.8x11.0x11.4x

10.2x

11.4x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

EV

/ E

BIT

DA

S&P 500

IndustryEnterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean18,095 15,759 698 14,583 1,527 8.2% 3,120 2.2x 1.0x 11.4x

Median4,060 4,086 260 4,249 379 8.1% 811 1.8x 1.0x 10.0x

Company Ticker

Size (Millions USD)EBITDA

Margin

Leverage Valuation

Enterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Agility Public

Warehousing Company

K.S.C.P.

KWSE:AGLTY 4,551 4,086 263 4,249 366 8.6% 285 0.8x 1.1x 12.4x

Air Transport Services

Group, Inc.NasdaqGS:ATSG 1,905 1,439 63 906 223 24.6% 508 2.3x 2.1x 8.5x

Atlas Air Worldwide

Holdings, Inc.NasdaqGS:AAWW 3,529 1,662 272 1,971 396 20.1% 1,950 4.9x 1.8x 8.9x

Deutsche Post AG XTRA:DPW 58,800 53,825 1,886 67,863 5,137 7.6% 5,195 1.0x 0.9x 11.4x

DSV A/S CPSE:DSV 15,100 14,061 279 11,043 768 7.0% 1,114 1.4x 1.4x 19.7x

Echo Global Logistics,

Inc.NasdaqGS:ECHO 725 538 20 1,753 32 1.8% 207 6.5x 0.4x NM

Expeditors International

of Washington, Inc.NasdaqGS:EXPD 9,707 10,819 1,115 6,422 702 10.9% NA NA 1.5x 13.8x

FedEx Corporation NYSE:FDX 72,142 60,489 3,503 60,953 8,252 13.5% 15,137 1.8x 1.2x 8.7x

Forward Air Corporation NasdaqGS:FWRD 1,745 1,734 10 1,029 144 14.0% 21 0.1x 1.7x 12.1x

Hub Group, Inc. NasdaqGS:HUBG 1,480 1,466 152 3,729 147 3.9% 106 0.7x 0.4x 10.1x

Kuehne + Nagel

International AGSWX:KNIN 21,784 22,121 529 17,946 1,120 6.2% NA NA 1.2x 19.5x

Landstar System, Inc. NasdaqGS:LSTR 4,060 4,180 222 3,334 272 8.1% NA NA 1.2x 14.9x

Panalpina World

Transport (Holding) Ltd.SWX:PWTN 3,230 3,477 260 5,461 119 2.2% 1 0.0x 0.6x NM

Radiant Logistics, Inc. AMEX:RLGT 295 261 6 778 29 3.7% 37 1.3x 0.4x 10.4x

Ryder System, Inc. NYSE:R 9,809 4,480 55 6,995 1,816 26.0% 4,796 2.6x 1.4x 5.4x

TFI International Inc. TSX:TFII 3,660 2,312 0 3,476 379 10.9% 1,246 3.3x 1.1x 9.7x

United Parcel Service,

Inc.NYSE:UPS 117,419 103,901 3,544 62,924 7,847 12.5% 14,281 1.8x 1.9x 15.0x

Universal Logistics

Holdings, Inc.NasdaqGS:ULH 816 582 2 1,125 72 6.4% 214 3.0x 0.7x 11.3x

XPO Logistics, Inc. NYSE:XPO 13,040 7,986 291 14,690 1,196 8.1% 4,816 4.0x 0.9x 10.9x

www.g2cap.com 8

Transportation & LogisticsPublic Trading Metrics – Marine




IndustryEnterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean6,608 3,871 652 4,892 721 21.5% 2,738 5.8x 1.4x 9.3x

Median3,104 1,215 214 937 250 19.0% 808 4.9x 1.2x 9.0x

Company Ticker


Margin

Leverage Valuation

Enterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Aegean Marine

Petroleum

Network Inc.

NYSE:ANW 979 201 82 5,301 107 2.0% 507 4.8x 0.2x 9.2x

A.P. Møller -

Mærsk A/S

CPSE:MAERSK

B51,999 38,729 3,644 36,631 7,155 19.5% 13,443 1.9x 1.4x 7.3x

COSCO Shipping

Specialized

Carriers Co., Ltd.

SHSE:600428 3,104 2,162 NM 937 154 16.4% 862 5.6x 3.3x NM

Costamare Inc. NYSE:CMRE 1,797 661 195 439 280 63.8% 754 2.7x 4.1x 6.4x

Diana Shipping

Inc.NYSE:DSX 977 385 42 124 NM -0.3% 634 NM NM NM

Evergreen Marine

Corporation

(Taiwan) Ltd

TSEC:2603 4,369 2,025 1,218 4,528 241 5.3% 2,501 10.4x 1.0x NM

Hapag-Lloyd

AktiengesellschaftDB:HLAG 14,697 6,917 860 9,660 820 8.5% 7,295 8.9x 1.5x NM

Kirby Corporation NYSE:KEX 4,155 3,562 NM 1,835 405 22.1% 592 1.5x 2.3x 10.2x

Matson, Inc. NYSE:MATX 1,954 1,215 15 2,007 226 11.2% 723 3.2x 1.0x 8.7x

Nippon Yusen

Kabushiki KaishaTSE:9101 11,247 3,503 1,356 17,580 762 4.3% 7,562 9.9x 0.6x NM

Nordic American

Tankers LimitedNYSE:NAT 954 545 34 313 90 28.6% 444 4.9x 3.0x 10.6x

Overseas

Shipholding

Group, Inc.

NYSE:OSG 501 197 205 433 125 28.9% 422 3.4x 1.2x 4.0x

Rand Logistics,

Inc.

NasdaqCM:RL

OG247 6 NM 114 22 19.0% NA NA 2.2x 11.4x

SEACOR Holdings

Inc.NYSE:CKH 1,395 818 223 860 111 12.9% 616 5.6x 1.6x NM

Seaspan

CorporationNYSE:SSW 3,706 876 306 844 501 59.4% 2,309 4.6x 4.4x 7.4x

Teekay LNG

Partners L.P.NYSE:TGP 4,088 1,417 191 404 279 69.2% 1,720 6.2x NM NM

Wallenius

Wilhelmsen

Logistics ASA

OB:WWL 6,173 2,593 755 1,156 258 22.3% 3,424 13.3x NM NM

9.0x

7.1x7.1x

7.8x8.2x

9.8x9.7x

10.5x

9.0x8.5x

9.3x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

EV

/ E

BIT

DA

S&P 5001.7x

1.4x

1.3x

1.7x1.5x

1.3x1.2x1.3x

1.3x1.3x

1.4x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

EV

/ T

OT

AL

RE

VE

NU

E

S&P 500

www.g2cap.com 9




IndustryEnterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean31,687 26,395 406 6,298 2,763 30.6% 5,576 2.1x 1.8x 9.3x

Median14,201 11,457 166 3,998 1,179 41.9% 4,161 2.1x 1.5x 10.5x

Company Ticker


Margin

Leverage Valuation

Enterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

American Railcar

Industries, Inc.NasdaqGS:ARII 1,190 737 103 536 152 28.4% 533 3.5x 2.2x 7.8x

Canadian National

Railway CompanyTSX:CNR 70,458 62,116 101 9,823 5,287 53.8% 6,726 1.3x NM 13.3x

Canadian Pacific Railway

LimitedTSX:CP 31,090 24,495 114 5,183 2,679 51.7% 5,908 2.2x NM 11.6x

CSX Corporation NasdaqGS:CSX 60,298 49,556 591 11,582 5,177 44.7% 11,788 2.3x NM 11.6x

FreightCar America, Inc. NasdaqGS:RAIL 111 243 101 507 11 2.1% NA NA 0.2x 10.4x

Genesee & Wyoming Inc. NYSE:GWR 7,289 4,614 84 2,077 615 29.6% 2,414 3.9x 3.5x 11.8x

Kansas City Southern NYSE:KSU 14,201 11,457 166 2,469 1,179 47.8% 2,244 1.9x NM 12.0x

Norfolk Southern

CorporationNYSE:NSC 47,620 38,109 642 10,226 4,286 41.9% 9,553 2.2x NM 11.1x

The Greenbrier

Companies, Inc.NYSE:GBX 1,593 1,372 465 2,153 345 16.0% 533 1.5x 0.7x 4.6x

Trinity Industries, Inc. NYSE:TRN 7,496 4,828 809 3,998 859 21.5% 829 1.0x 1.9x 8.7x

Union Pacific

CorporationNYSE:UNP 107,205 92,821 1,286 20,724 9,800 47.3% 15,229 1.6x NM 10.9x

Transportation & LogisticsPublic Trading Metrics – Rail Services

8.4x7.9x

6.6x

9.5x10.1x

9.1x9.6x

10.4x

9.7x

7.6x

9.3x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

EV

/ E

BIT

DA

S&P 500

2.0x2.2x

1.9x

2.5x

2.2x

1.7x1.8x

2.3x2.3x

2.1x

1.8x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

EV

/ T

OT

AL

RE

VE

NU

E

S&P 500

www.g2cap.com 10

Transportation & LogisticsPublic Trading Metrics – Trucking




IndustryEnterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean3,187 2,696 70 2,222 322 9.9% 612 1.9x 1.0x 7.5x

Median1,173 990 38 1,209 156 12.5% 161 1.6x 0.9x 7.0x

Company Ticker


Margin

Leverage Valuation

Enterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

ArcBest Corporation NasdaqGS:ARCB 961 860 103 2,774 147 5.3% 195 1.3x 0.3x 6.5x

Celadon Group, Inc. NYSE:CGI 561 187 6 1,055 83 7.9% 115 1.4x 0.5x 6.7x

Covenant Transportation

Group, Inc.NasdaqGS:CVTI 719 530 NM 679 98 14.4% 161 1.6x 1.1x 7.4x

Daseke, Inc. NasdaqCM:DSKE 949 579 42 682 74 10.9% 322 4.3x 1.4x 12.7x

Heartland Express, Inc. NasdaqGS:HTLD 1,918 2,089 171 549 165 30.1% NA NA 3.5x 11.6x

J.B. Hunt Transport

Services, Inc.NasdaqGS:JBHT 13,092 12,156 8 6,920 1,043 15.1% 1,085 1.0x 1.9x 12.5x

Knight Transportation,

Inc.NYSE:KNX 7,292 7,379 89 1,114 243 21.8% NA NA 6.5x NM

Landstar System, Inc. NasdaqGS:LSTR 4,060 4,180 222 3,334 272 8.1% NA NA 1.2x 14.9x

Marten Transport, Ltd. NasdaqGS:MRTN 1,110 1,120 10 688 133 19.4% NA NA 1.6x 8.3x

Old Dominion Freight

Line, Inc.NasdaqGS:ODFL 9,133 9,072 34 3,122 719 23.0% 45 0.1x 2.9x 12.7x

P.A.M. Transportation

Services, Inc.NasdaqGM:PTSI 285 152 NM 436 52 12.0% 102 1.9x 0.7x 5.4x

Roadrunner

Transportation Systems,

Inc.

NYSE:RRTS 765 365 5 1,972 101 5.1% NA NA 0.4x 7.6x

Ryder System, Inc. NYSE:R 9,809 4,480 55 6,995 1,816 26.0% 4,796 2.6x 1.4x 5.4x

Saia, Inc. NasdaqGS:SAIA 1,727 1,579 NM 1,292 168 13.0% 55 0.3x 1.3x 10.3x

Universal Logistics

Holdings, Inc.NasdaqGS:ULH 816 582 2 1,125 72 6.4% 214 3.0x 0.7x 11.3x

USA Truck, Inc. NasdaqGS:USAK 239 112 NM 418 19 4.5% 80 4.3x 0.6x 12.8x

Werner Enterprises, Inc. NasdaqGS:WERN 2,694 2,642 23 2,048 334 16.3% 75 0.2x 1.3x 8.1x

YRC Worldwide Inc. NasdaqGS:YRCW 1,181 373 182 4,748 253 5.3% 717 2.8x 0.2x 4.7x

6.1x6.2x

6.3x

7.9x 7.9x

7.4x 7.6x

8.9x

7.6x6.2x

7.5x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

EV

/ E

BIT

DA

S&P 500

0.8x0.7x

0.7x

0.9x0.8x 0.8x

0.9x1.1x 1.1x

0.9x1.0x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

EV

/ T

OT

AL

RE

VE

NU

E

S&P 500

www.g2cap.com 11

Transportation & LogisticsMarket Indicators

Market Index Trends

Last 5 Year EV / EBITDA Trend by Industry


The Transportation sector has recovered considerably over the last 12 months, tracking closely to the

S&P 500 index since Q4 of 2016.


Though still tracking below the S&P 500 EV/EBITDA multiple average, the industry has begun to slowly increase

its averages since Q4 2016, led by the Logistics segment followed by Rail and Trucking segments. The Marine

subsector has seen a slight decline over the last quarter.

-20%

0%

20%

40%

60%

80%

100%

120%

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Q2'14

Q3'14

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Q1'16

Q2'16

Q3'16

Q4'16

Q1'17

Q2'17

Q3'17

S&P 500 Transportation (Industry) S&P 500

0.0x

5.0x

10.0x

15.0x

Q1 '12 Q3 '12 Q1 '13 Q3 '13 Q1 '14 Q3 '14 Q1 '15 Q3 '15 Q1 '16 Q3 '16 Q1 '17 Q3 '17

EV

/ E

BIT

DA

S&P 500 Logistics Marine Rail Services Trucking

www.g2cap.com 12

Transportation & LogisticsM&A Activity – Middle Market

M&A transaction multiples are the median North American M&A activity independent of target / acquirer industry and enterprise

value. The dataset has been restricted to multiples between 0.0x and 30.0x EBITDA;

*Sourced through Pitchbook’s Q3 2017 Report.

US PE Buyout Activity by Quarter

US M&A Transaction Multiples

*Sourced through PitchBook Q3 2017 Report

Though mid market deal volumes have come down off historical highs, frothy debt availability

continues to drive premium valuations.3

40

32

2 40

0

40

5 51

6

40

7

47

6

52

9

50

2

50

1

49

5

48

8

52

0

51

4

48

2

49

4

48

7

40

8

38

1

22

4

19

5

23

4 30

2

28

9

28

2 30

1 31

3

31

3

30

8

29

5

34

0

25

7

30

0

29

4

27

8

27

1

24

2

19

8

52%

54%

56%

58%

60%

62%

64%

66%

68%

0

100

200

300

400

500

600

700

800

900

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q

2013 2014 2015 2016 2017*

Ad

d-O

n %

of B

uyo

ut

Deal V

alu

e (

$M

M)

Axis Title

Add-on Non Add-on Add-On % of Buyout

4.6x5.2x

4.7x

5.5x5.2x

5.7x5.4x

5.8x

3.5x4.x 3.8x 3.8x 4.x

4.5x

5.3x

4.7x

8.1x

9.1x

8.5x

9.3x 9.2x

10.1x10.7x 10.5x

$0

$2

$4

$6

$8

$10

$12

2010 2011 2012 2013 2014 2015 2016 2017*

Deal V

alu

e (

$B

)

Debt / EBITDA Equity / EBITDA Valuation / EBITDA

www.g2cap.com 13

G2 Capital Advisors provides C-level led investment banking and restructuring advisory services to

middle market institutional investors and companies. G2 offers a comprehensive suite of investment

banking services, creating a one-stop shop with non-conflicting strategic alternatives perspectives on

what is truly best fit for each client.

G2 OverviewInvestment Banking and Restructuring Advisory

THIRTY-FIVE professionals

across SIX offices

FOUR Industry Practice Groups

Transportation & Logistics / Supply Chain

Industrials / Manufacturing

Technology / Business Services

Aerospace & Defense / Security

FIVE Service Offerings

Securities

Sell-Side

Buy-Side

Operational

Restructuring

Financial

Restructuring

G2 Capital Advisors offers an integrated and complementary set of financial and corporate advisory

services to assist our clients through the lifecycle of a business.

G2 is focused in four sectors; each practice group headed by a leader with 20+ years of C-level

operating experience. G2’s managing directors have navigated all stages of the corporate lifecycle, from

growth to maturity, and apply that experience to provide advisory services to our clients.

Sector-Focused; Experience-Based

Transportation &

Logistics / Supply Chain

Industrials /

Manufacturing

Technology /

Business Services

Aerospace & Defense /

Security

Led by Ron Lentz Led by Jack Shields Led by Matt Konkle Led by Jim Bullion

Freight Forwarding

Trucking / Final Mile

Warehousing / Distribution

Third Party Logistics (3PL)

e-Commerce Fulfillment

Manufacturing / Distribution

Flooring

Plastics / Packaging

Consumer Products

Metals

Tech-enabled Services

BPO

Managed Services

Internet & Digital Media

Business Services

Cyber Security

Defense Robotics

UAV, C4ISR, Hardware

Aerospace Electronics

Telecommunications

G2 Overview

www.g2cap.com 14

Company Title Role

CEO

Restructured operations of international freight

forwarder and acquired 11 companies in 18

months before selling the parent at 4.5x premium.

EVPDoubled the size of company sales and EBITDA

in 18 months before selling at a 2.5x premium.

COORestructured and recapitalized the company,

before selling for $400 million.

COO

Restructured platform company for a private

equity group before selling for $658 million –

representing a 6x return on initial investment.

CEO

Co-founded the business in 2000, building the

company from start-up to $150 million in

revenues in 18 months then sold to private equity

firm in 2002.

EVPBuilt Ryder’s 3PL division from $100 million

revenues in 1988 to $2.4 billion in 1999.

Ron LentzPractice Leader


Ron Lentz, Managing Director

G2 Capital Advisor’s Transportation & Logistics industry practice leader, Ron Lentz, brings 25+ years of C-

level leadership and operating experience to the Transportation & Logistics practice group.

G2 OverviewSelect On-going G2 Projects

G2 Overview

Project Armor – G2 is currently advising a high growth, asset-

light, tech-enabled healthcare logistics provider in a sell-side

process. The client provides expedited logistics of

pharmaceuticals in a B2B capacity in North America.

Project Armor

Sell-Side

Healthcare Logistics

Project Customs – G2 is currently advising a leading customs

brokerage, compliance, and freight solutions provider in a buy-

side process. Search criteria includes:

Core Services: sophisticated Air freight forwarding,

international freight forwarding

Value-Added Services: Asset-light ancillary services,

import services, freight / customs bundling

Location: Headquartered in North America

Project Customs

Buy-Side

Freight Forwarding and

Customs Brokerage

www.g2cap.com 15

ReferenceG2 Team

For more information about G2, please visit: www.g2cap.com

Our corporate headquarters is located at: 535 Boylston Street, 11th Floor, Boston, MA 02116

Boston | Chicago | Indianapolis | Los Angeles | Naples | San Francisco

The information included in this Presentation is not a complete analysis of all material facts regarding any company,

industry, or security and does not constitute investment advice. Opinions expressed or implied by the materials here

presented reflect only the judgement of its author as of the date of the Presentation and is subject to change without

notice. The information in this Presentation has been obtained from sources which G2 generally considers reliable, but

we make no representation or warranty, express or implied, as to the accuracy or completeness of any information

herein. This Presentation has been prepared for informational purposes only and upon the express understanding that it

will be used only for the purposes set forth in the Section captioned G2 Overview above. G2 expressly disclaims any

and all liability which may be based on such information, errors therein or omissions there from. Securities offered

through Western International Securities, Inc. Member FINRA & SiPC. G2 Securities and Western International

Securities are separate and unaffiliated entities.

Ron Lentz, Managing Director Jeffrey Unger, CEO

[email protected] [email protected]

630.362.8317 617.918.7929

Theodore Bang, Analyst

[email protected]

617.910.0918

Term Definition

Revenue

Total revenue from the sale of goods and services rendered during the reporting period, in normal course of

business, reduced by sales returns and allowances, and sales discounts. For banks, this item is defined as net

interest income after loan loss provisions

EBITDAEarnings before interest, taxes, depreciation, and amortization. Calculated as Revenue – Expenses, excluding

interest, taxes, depreciation and amortization

Market CapMarket value of a company using most recently reported basic weighted average shares outstanding.

Calculated as Market Price (as of period end) * Basic Weighted Average Shares Outstanding

Long-Term DebtSum of the carrying values as of the balance sheet date of long-term debt with a maturity beyond one year or

the normal operating cycle, if longer

Net DebtNet Debt shows the company’s overall debt situation by netting the value of debts with cash and other similar

liquid assets. Calculated as Total Debt – Cash & Cash Equivalents and Short Term Investments

Enterprise Value

Enterprise Value represents the combined economic value of a company as of the most recent fiscal year end.

Calculated as Diluted Market Capitalization + Total Debt + Minority Interest + Preferred Stock – Cash and Short

Term investments

P/EA valuation ratio of a company stock price compared to its per share earnings. Calculated as Market Price /

Earnings per Share for the last annual period

Tangible Book Value Total Shareholder’s Equity – Goodwill and Intangible Assets

mailto:[email protected]



Documents

Transportation & Logistics - G2 Capital Advisorsg2capitaladvisors.com/wp-content/uploads/2018/03/TL-Q3-2017.pdf · Logistics Dedicated (Pending) –J.B. Hunt, trucking and intermodal