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ArcBest acquires truckload brokerage firm in a $235 million all-cash deal

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  • ArcBest acquires truckload brokerage firm in a $235 million all-cash deal

    ABF's last two contracts at work... for Judy and ArcBest... that is...

    Fort Smith-based ArcBest has signed a deal to acquire Chicago-based MoLo Solutions, a truckload freight brokerage firm, in a cash deal of at least $235 million. The deal will place ArcBest in the top 15 U.S. truckload brokerage market, the company said Wednesday (Sept. 29).

    The statement from ArcBest noted that MoLo has access to more than 70,000 “carrier partners” in the truckload shipping business. MoLo posted 2020 revenue of $274 million, and is on track for $600 million in revenue in 2021 – a clear indicator of the ongoing demand for global shipping services.

    ArcBest is a shipping and logistics company and its primary subsidiary is ABF Freight, one of the nation’s largest less-than-truckload carriers. ArcBest, which has a market capitalization of $1.986 billion, has almost 14,000 employees and operates at 250 campuses and service centers.

    The $235 million all-cash deal, subject to regulator approval but expected to close in the fourth quarter, also includes cash bonuses to MoLo owners based on achieving undisclosed financial targets between 2023 and 2025, according to ArcBest.

    “We are pleased to add MoLo’s significant capabilities and talent to our truckload brokerage offering, allowing us to better meet the critical needs of our customers, deliver comprehensive supply chain solutions and accelerate our company’s continued growth,” Judy McReynolds, ArcBest chairman, president and CEO, said in the statement. “Since its founding four years ago, MoLo has built a strong foundation and reputation for excellence based on trusted customer and carrier relationships, as well as a proven ability to offer unsurpassed service. Since we began discussing a possible transaction several months ago, it became clear what a great fit MoLo was with ArcBest.”

    The deal taps into ArcBest’s significant cash holdings. When ArcBest posted second quarter financials on Aug. 2, the company reported cash and cash equivalents of $362.619 million. Revenue in the first half of 2021 was $1.778 billion, up 34% compared with the $1.328 billion in the same period of 2020. Net income (unadjusted) in the first half was $84.342 million, considerably more than the $17.782 million in the same period of 2020.
    ArcBest’s “strategic” reasons to acquire MoLo included the following.

    • Acceleration of asset-Light business (ArcBest logistics) growth by improving ArcBest’s ability to serve larger customers.
    • Expanding access to companies with truckload operations,
    • Expansion of revenue potential through increased cross-selling potential,
    • Larger presence in the logistics hub of Chicago, and
    • The deal is expected to boost ArcBest earnings per share within the first year of full combined operations.

    “MoLo has been able to reach $600 million in annual revenues with only 500 shippers; in doing this deal, we can now tap into ArcBest’s 30,000 existing shippers and offer them the same level of service we’ve been providing our existing customers,” MoLo CEO Andrew Silver noted in the statement. “In addition to that, we can now offer our customers a breadth of services we couldn’t before, including owned assets, increased drop trailer capabilities, LTL, expedited, outsourced transportation management, and more.”

    Silver is expected to remain as MoLo CEO, according to ArcBest President of Asset-Light Logistics and Chief Yield Officer Danny Loe.

    ArcBest shares (NASDAQ: ARCB) closed Wednesday (Sept. 29) at $76.78, down 91 cents. During the previous 52 weeks the share price has ranged between $93.96 and $29.02.

    https://talkbusiness.net/2021/09/arc...all-cash-deal/

  • #2
    Re: ArcBest acquires truckload brokerage firm in a $235 million all-cash deal

    ArcBest Corporation (ARCB) CEO Judy McReynolds on MoLo Solutions Acquisition - Conference Call Transcript

    Judy McReynolds...

    On Slide 3, of the presentation, we've summarized the strong business momentum ArcBest has achieved so far this year. As evidenced by today's 8-K update, we are excited that this momentum is continuing into the second-half of the year. Comparing back to 2020, which was impacted by the effects of the pandemic, we have rebounded nicely with preliminary expected consolidated revenue growth through the third quarter of 2021 at 32%, and that includes asset based revenue growth of 24%, and revenue growth at 55% in the asset-light ArcBest segment.

    On a non-GAAP basis, through the third quarter of 2021, our year-to-date asset base operating ratio is expected to be 89.6%. Our annual non-GAAP asset base operating ratio has improved nearly 600 basis points since 2016. Along with the revenue increase, our asset-light profits have grown substantially this year. So, our business is performing well. We have strong tailwinds and we are pursuing this accretive growth opportunity from a position of strength. As we entered this strategic transaction, we are in a very solid financial position.



    Jeff Kauffman...

    Last clarification, Judy when you were in your opening comments, you mentioned an 89.6%. And you were just talking so fast, I couldn't keep up with the writing. What were you referring to with the 89.6%?

    Judy McReynolds...

    Well, it's on Slide 3. And what we did, well, I don't know if you saw this, Jeff, but we did an 8-K that gave an update on the third quarter. So using that information and combining it with our first six months results, takes you to Slide 3, which gives you a year-to-date asset based OR of 89.6%.

    Jeff Kauffman...

    Okay, year-to-date.

    Judy McReynolds...

    Yeah, we're not buying along all those numbers, so we’re close. Yeah.

    https://seekingalpha.com/article/445...onference-call

    Comment


    • #3
      Re: ArcBest acquires truckload brokerage firm in a $235 million all-cash deal







      https://static.seekingalpha.com/uplo...4/original.pdf

      Comment


      • #4
        Re: ArcBest acquires truckload brokerage firm in a $235 million all-cash deal

        Originally posted by Docker View Post
        ABF's last two contracts at work... for Judy and ArcBest... that is...
        I am sure they have the same "magic pencils" that YRC uses..

        Comment


        • #5
          Re: ArcBest acquires truckload brokerage firm in a $235 million all-cash deal

          Record profits,money to burn,stock price through the stratosphere,Wall St.loves acquisitions,MoLo is a third party logistics company,immediately gives the company access to equipment and drivers...For years the stock price hovered in the high teens,maybe 20 range,now look at it...

          https://finance.yahoo.com/quote/arcb?ltr=1

          The rating agencies have been touting ArcBest's growth for some time now,UP-UP-and AWAY!!!!....Contract is up I think in a year and a half,a lot can happen in between,but if this trend continues I wonder how they'll play it...Poverty?....Hell,you can use any and all the ''magic pencils'' you want,it won't change the fact that corporate executives are making a killing on their 'stock portfolios'....

          https://finance.yahoo.com/quote/arcb?ltr=1

          https://www.entrepreneur.com/article/389664

          https://www.entrepreneur.com/article/389479

          Comment


          • #6
            Re: ArcBest acquires truckload brokerage firm in a $235 million all-cash deal

            Originally posted by wizard View Post
            Record profits,money to burn,stock price through the stratosphere,Wall St.loves acquisitions,MoLo is a third party logistics company,immediately gives the company access to equipment and drivers...For years the stock price hovered in the high teens,maybe 20 range,now look at it...

            https://finance.yahoo.com/quote/arcb?ltr=1

            The rating agencies have been touting ArcBest's growth for some time now,UP-UP-and AWAY!!!!....Contract is up I think in a year and a half,a lot can happen in between,but if this trend continues I wonder how they'll play it...Poverty?....Hell,you can use any and all the ''magic pencils'' you want,it won't change the fact that corporate executives are making a killing on their 'stock portfolios'....

            https://finance.yahoo.com/quote/arcb?ltr=1

            https://www.entrepreneur.com/article/389664

            https://www.entrepreneur.com/article/389479
            missed one...https://www.entrepreneur.com/article/389651

            Comment

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