800.644.1704 |

TRUCKING & LOGISTICS MERGER & ACQUISITION PERSPECTIVES

1H 2018

bkdcorporatefinance.com

OVERVIEW & HIGHLIGHTS

2

Merger and acquisition (M&A) activity in the trucking and logistics market remained stable in the first half of 2018 compared to the same period in 2017. The trucking sector’s activity showed a modest decline, while the logistics sector grew at a meaningful pace. The overall sector remains strong as industry demand continues to outpace capacity. Carriers are becoming extremely selective at designating specific routes and keeping only customers with the greatest profit potential. Growth is mainly realized through price increases rather than volume as many carriers are operating at nearly full capacity.

Industry Highlights

• Carriers are taking advantage of a strong seller’s market by raising freight rates more than 6 percent annually over the past five years

• Strong economy, along with surging demand and record demands are causing capacity shortages among logistics operations

• While diesel prices increases are negative for carriers, price increases and strong demand have significantly outweighed the additional operating costs

• T&L industry is seeing major disruptions, such as Uber Freight, which provides on-demand freight services, as well as an electric semitruck from Tesla that has a range of more than 500 miles.

• Concern over cyberthreats are growing, as CEOs recognize that carrier legacy systems are more vulnerable to cyberattacks

CONTENTS

Deal Activity

Public Comparables

Trucking

Logistics

About BKD Corporate Finance

BKD Services

ABOUT BKDCF

Founded in 1994, BKD Corporate Finance helps companies and stockholders go beyond their numbers by creating value through investment banking solutions that include mergers, acquisitions, sales, recapitalizations, management buyouts and financings.

T&L CONTACTS

Source: S&P Capital IQ, Material Handling & Logistics

Tony Schneider

Managing Director

Indianapolis, IN

317.383.4000

tschneider@bkd.com

Gregory Lafin

Managing Director

Chicago, IL

630.282.9500

glafin@bkd.com

16

18

11

23

Deals by Segment 1H 2017 vs.

1H 2018

2018 2017

Logistics

Trucking

27.8%

31.3%

bkdcorporatefinance.com

DEAL ACTIVITY

3

Source: S&P Capital IQ

Financial15%

Strategic85%

1H 2018 Deals by Buyer Type

2018 YTD Select Deals by Segment

Date Target Buyers

Trucking

7/17/18 Manna Freight Systems, Inc. Pilot Freight Services, Inc.

7/11/18 Walt's Drive-A-Way Services, Inc. Warehouse Services, Inc.

6/27/18 Prime EFS LLC Transportation and Logistics Systems, Inc. (OTCPK:PTRA.D)

6/6/18 1-800-Pack-Rat, LLC Zippy Shell Incorporated

5/11/18Northern Virginia, Maryland Domestic, Commercial And Storage Operations of Suddath Van Lines, Inc.

Hilldrup Companies, Inc.

4/3/18 Normandin Transit TFI International

3/22/18 Artex Inc. Crozier Fine Arts Inc.

3/17/18 P & S Transportation, LLC OEP Capital Advisors, L.P.

3/16/18 Abilene Motor Express, Inc. Knight Transportation Inc.

2/23/18 Central Arizona Freight Red Arts Capital

2/15/18 Tidewater Logistics Corporation Apollo Global Management, LLC (NYSE:APO)

2/2/18 Fore Transportation, Inc. Universal Logistics Holdings, Inc. (NasdaqGS:ULH)

Logistics

6/20/18 Epes Transport Systems Penske Logistics

6/5/18 GlobalTranz Enterprises The Jordan Company

6/5/18 Service Cold Storage Lineage Logisics

6/4/18 Pensacola Stevedore Co. Logistec Corp

5/15/18 Peach State Integrated Technologies Bastian Solutions

5/14/18 Source One Management Services Corcentric LLC

4/30/18 ROAR Logistics Redwood Logistics

4/3/18 MXD Group Ryder

3/31/18 Azuga Sumeru Equity Partners

3/15/18 Freight Force St. George Logistics

3/6/18 Jarvis Trans RoadOne

bkdcorporatefinance.com

32 3552 59 51

31 4124 29

11

2029

4149

36

4650

3135

23

2009 2010 2011 2012 2013 2014 2015 2016 2017 1H2018

Deals by Segment

2009−1H 2018

Trucking Logistics

DEAL ACTIVITY

4

Source: S&P Capital IQ, Pitchbook and GF Data (consists of middle market private equity transactions from 2005 to 2018)

Top 10 Private Equity Buyers with Active

Holdings in Trucking/Logistics Segments

Investor Name# of Active

Holdings

Segment

Investment Interest

Platinum Equity 7 Logistics

The Jordan Company 6 Logistics

HCI Equity Partners 5 Trucking & Logistics

Eos Partners 4 Logistics

Comvest Partners 4 Logistics

Audax Group 4 Logistics

H.I.G. Capital 4 Logistics

Oak Hill Capital Partners 4 Logistics

Linx Partners 4 Trucking & Logistics

LongueVue Capital 4 Logistics

5.4x5.0x

5.3x

6.8x

5.8x6.3x

6.9x

7.9x

$10MM - $25MM $25MM - $50MM $50MM - $100MM $100MM - $250MM

Middle Market Truck Transportation & Distribution Deals

EV to EBITDA Multiples

Truck Transportation Distribution

Top 10 Strategic Buyers by Number

of Deals (2015–1H 2018)

Investor Name# of

Acquisitions

GlobalTranz Enterprises, Inc. 4

Radiant Logistics, Inc. (AMEX:RLGT)

3

Magnate Worldwide, LLC 3

CAI International, Inc. (NYSE:CAI)

3

Celadon Group, Inc. (NYSE:CGI) 3

Dicom Transportation Group, L.P.

3

Kuehne + Nagel International AG (SWX:KNIN)

2

ABF Logistics II, Inc. 2

Blue-Grace Logistics LLC 2

CRST International, Inc. 2

bkdcorporatefinance.com

PUBLIC COMPARABLES

5

Source: S&P Capital IQ

10.9x

10.1x

6.5x

NTM EV/EBITDA

15.0% 15.6%

8.4%

S&P 500 Logistics Trucking

Average Revenue Growth 1H 2018

14.6%

11.6%13.3%

S&P 500 Logistics Trucking

Average EBITDA Growth 1H 2018

12.8x

12.7x

8.9x

S&P 500

Logistics

Trucking

LTM EV/EBITDA

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%T&L Segments vs. S&P 500

Price Change

Trucking Logistics S&P 500

bkdcorporatefinance.com

TRUCKING PUBLIC COMPARABLES

6

Source: S&P Capital IQ

Company Ticker

Recent Price

(7/31/2018)

TTM

Revenue

TTM

EBITDA

Enterprise

Value

EBITDA

Margin

EV to

Sales

EV to

EBITDA

Daseke, Inc. DSKE $8.69 $1,013 $104 $1,007 10.27% 0.99 9.68

P.A.M. Transportation Services, Inc. PTSI 54.55 475 66 488 13.84% 1.03 7.44

ArcBest Corporation ARCB 46.55 2,948 199 1,218 6.75% 0.41 6.12

Covenant Transportation Group, Inc. CVTI 28.98 752 118 707 15.65% 0.94 6.01

Heartland Express, Inc. HTLD 19.19 660 145 1,470 22.01% 2.23 10.12

J.B. Hunt Transport Services, Inc. JBHT 119.90 7,921 1,109 14,100 14.00% 1.78 12.72

Landstar System, Inc. LSTR 111.15 4,229 331 4,531 7.82% 1.07 13.70

Marten Transport, Ltd. MRTN 21.85 737 138 1,172 18.76% 1.59 8.47

Old Dominion Freight Line, Inc. ODFL 146.80 3,723 892 11,971 23.96% 3.22 13.42

Saia, Inc. SAIA 75.35 1,513 210 2,059 13.85% 1.36 9.83

USA Truck, Inc. USAK 21.82 498 42 267 8.38% 0.54 6.40

Werner Enterprises, Inc. WERN 37.25 2,278 384 2,761 16.88% 1.21 7.18

YRC Worldwide Inc. YRCW 9.74 5,001 251 1,127 5.01% 0.23 4.49

Knight-Swift Transportation Holdings Inc. KNX 32.55 4,484 753 6,550 16.80% 1.46 8.69

Roadrunner Transportation Systems, Inc. RRTS 2.19 2,210 -30 545 -1.36% 0.25 NM

1.07 8.58

1.22 8.88

2.50 13.07

1.25 9.86

0.96 7.62Average Small Cap (Under $2B)

Average Mid Cap ($2B - $10B)

in millions of dollars Enterprise Values

Median

Average

Average Large Cap (Over $10B)

bkdcorporatefinance.com

7.0x 9.3x 7.4x 7.0x 7.7x 8.9x 7.8x 6.9x 8.5x 11.1x

7.8x8.8x 8.4x 8.2x

9.1x10.0x10.5x

11.1x12.2x

13.1x

Ten-Year Average EV/EBITDA

Trucking Publics vs. S&P 500

Average of Trucking Average of S&P 500

0.6x 0.8x 0.8x 0.8x 1.0x 1.2x 1.1x 1.0x 1.2x 1.5x

1.3x1.6x 1.6x 1.5x

1.7x1.9x

2.0x 2.1x2.4x

2.6x

Ten-Year Average EV/Revenue

Trucking Publics vs. S&P 500

Average of Trucking Average of S&P 500

LOGISTICS PUBLIC COMPARABLES

7

Source: S&P Capital IQ

bkdcorporatefinance.com

7.9x 10.2x 9.0x 8.5x 13.0x10.5x10.5x 9.2x 11.3x12.1x

7.8x8.8x 8.4x 8.2x

9.1x10.0x

10.5x11.1x

12.2x13.1x

Ten-Year Average EV/EBITDA

Logistics Publics vs. S&P 500

Average of Logistics Average of S&P 500

0.9x 1.2x 1.2x 1.1x 1.2x 1.3x 1.3x 1.3x 1.4x 1.5x

1.3x1.6x 1.6x 1.5x

1.7x1.9x

2.0x 2.1x2.4x

2.6x

Ten-Year Average EV/Revenue

Logistics Publics vs. S&P 500

Average of Logistics

Average of S&P 500

Company Ticker

Recent Price

(7/31/2018)

TTM

Revenue

TTM

EBITDA

Enterprise

Value

EBITDA

Margin

EV to

Sales

EV to

EBITDA

Forward Air Corporation UPS $63.90 $1,188 $153 $1,896 12.86% 1.60 12.42

Expeditors International of Washington, Inc. FDX 76.17 7,515 811 12,175 10.79% 1.62 15.01

C.H. Robinson Worldwide, Inc. CHRW 92.23 15,946 898 13,938 5.63% 0.87 15.52

FedEx Corporation XPO 245.87 65,450 8,343 78,703 12.75% 1.20 9.43

Hub Group, Inc. EXPD 46.40 4,494 191 1,861 4.25% 0.41 9.74

United Parcel Service, Inc. ZTO 119.89 69,004 9,735 117,495 14.11% 1.70 12.07

XPO Logistics, Inc. FWRD 99.72 16,636 1,397 17,621 8.40% 1.06 12.61

Atlas Air Worldwide Holdings, Inc. ATSG 67.05 2,420 492 3,848 20.34% 1.59 7.82

Echo Global Logistics, Inc. AAWW 34.45 2,269 65 1,154 2.89% 0.51 17.62

Air T, Inc. HUBG 32.75 195 7 111 3.56% 0.57 16.04

Universal Logistics Holdings, Inc. ECHO 33.50 1,328 104 1,209 7.86% 0.91 11.59

Radiant Logistics, Inc. RLGT 3.99 810 24 238 2.95% 0.29 9.95

0.98 12.24

1.03 12.48

1.29 12.93

0.84 12.17Average Small Cap (Under $2B)

in millions of dollars Enterprise Values

Median

Average

Average Large Cap (Over $10B)

ABOUT US

BKDCF, a wholly owned subsidiary of BKD, LLP, helps companies and stockholders go beyond their numbers by creating value through investment banking solutions that include mergers, acquisitions, sales, recapitalizations, management buyouts and financings.

Founded in 1994, BKDCF is staffed with experienced investment bankers and financial analysts. In addition, the firm draws on the resources of BKD with its network of accountants, auditors, tax professionals, business consultants and industry-specific consultants.

BKDCF is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.

The professionals of BKDCF have more than 200 years of combined experience

helping company owners plan for and execute their growth and exit strategies.

From managing the sale of a company to negotiating the acquisition of a

competitor or raising debt and equity capital to improve financial and operational

flexibility, BKDCF can help you to develop a specific course of action for achieving

your desired results.

Construction &

Engineering

Financial

Services

Health

Care

Manufacturing

&

Distribution

Business

Services

Consumer

Services &

Products

Energy

Technology,

Media &

Telecom

INDUSTRY FOCUS

BKD/BKDCF OfficeBKD Office

Tony Schneider

Managing Director

Indianapolis, IN

317.383.4000

tschneider@bkd.com

CONTACT US – T&L TEAM

8

Gregory Lafin

Managing Director

Chicago, IL

630.282.9500

glafin@bkd.com

bkdcorporatefinance.com

BKD SERVICES

Abundant services.

Sheer precision.

BKD, LLP offers a full range of services and industry-focused expertise to provide you with insightful solutions and help you stay a cut above the competition.

FINANCIAL

ASSURANCE• Audit, review & compilations• Benchmarking• Internal audit• Internal control studies• SEC filings• SOX 404 compliance

CONSULTING• Accounting outsourcing• Bankruptcy consulting• Budgeting & financial planning• Cost accounting• Employee benefit plan

structuring & administering• ESOP feasibility analysis• Forecasts & projections

FEDERAL & STATE TAX

PLANNING & COMPLIANCE• Compensation planning• Corporate tax planning• Inventory tax planning• R&D tax credit enhancements• Real estate cost segregation

studies• Restructuring planning• State & local tax planning

FORENSICS & VALUATION

CONSULTING• Bankruptcy services• Business valuations• Fraud prevention• Litigation support

INTERNATIONAL TAX

STRATEGIES• DISC• Expatriate assignment services• Foreign tax credit planning• Global structuring support• Indirect global taxes• Transfer pricing

INVESTMENT & FINANCIAL

PLANNING• Estate & gift planning• Family tax planning• Investment management• Personal wealth planning• Retirement planning

TRANSACTION SERVICES• Federal, state & local tax

diligence• Financial diligence• Operations diligence• Technology diligence

GROWTH & ADVISORY

INVESTMENT BANKING• Mergers & acquisitions• Company sales & divestitures• Debt & equity recapitalizations• Management buyouts• Affiliations• Succession planning• Strategic options analysis

ECONOMIC DEVELOPMENT• Expansion projects• Grants & public incentives

INTERNATIONAL MARKET• Development• Exporting• Direct investment• Licensing• Acquisitions

OPERATIONS MANAGEMENT

PERFORMANCE ENHANCEMENT

ADVICE & KNOW-HOW (PEAK)

METHODOLOGY• Business process improvement• Decision costing• Inventory optimization• Lean manufacturing• Profit improvement

TECHNOLOGY

APPLICATIONS SOFTWARE• Best-Abra• MAS 90, 200 & 500• Microsoft CRM• Microsoft Dynamics AX• Microsoft Dynamics GP

IT SERVICES• IT assessments & planning• IT control reviews• Project management assistance• Security solutions & penetration

testing

STRATEGIC TECHNOLOGY• E-business planning• IT assessments & planning• Systems selection & implementation

9bkdcorporatefinance.com