Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog
Subscribe to this list via RSS Blog posts tagged in Doug Nix

At a recent Driving for Profit Seminar in Toronto, Lou Smyrlis, Editorial Director of Canadian Transportation & Logistics Magazine, led two trucking company investment advisors, Doug Nix, Vice Chairman of Corporate Finance Associates and Doug Davis, Independent Director, Pro-Trans Ventures Inc. through a discussion of how to buy and sell trucking companies in 2012.  Here is what they had to say.

From a buyer perspective, they encouraged companies to be proactive in seeking out prospective acquisition candidates.  Since so much about buying is timing, it always important to plant the seed and remain in contact.  While a trucking company’s leaders may not be ready to sell their enterprise in the second quarter of 2012, it is at least important as a purchaser to express your interest. One should also keep in mind that the purchase process itself can take six to nine months or more complete.

The buyer should carefully think through some key questions such as “why” make this purchase, what are the underlying business risks of a potential acquisition, do they have the investment advisor team in place to guide them through the process and do they have the “bandwidth” (management team) to manage the acquisition? In other words, can the company manage its current base of business while it is trying to assimilate new customers, new employees and possibly fit two cultures together?

The two advisors mentioned that they use a valuation multiple for an asset-based business of 3.75 X normalized EBITDA.  The word “normalized” is an important concept since this refers to what the earnings will look like when certain expenses or withdrawals that are taken out of the company by the current owners are removed from the income statement to better reflect what the business will look like on a going forward basis.

The purchaser must look at a number of variables in determining how to pay for the company.  The advisers related it to buying a home. The purchaser looks at what they can make in terms of a down payment and the level of mortgage they wish to carry.   Similarly, when buying a trucking company, one needs to consider the financial structure of their offer.  This involves an evaluation of cask payment, business loan and earn-out.  The latter is a common term that refers to principle of paying the seller part of the purchase price from monies earned by the business over a period of years.  If the sellers remain with the business after implementation and help maintain the income flow, they are rewarded with a business retention bonus for their efforts. 

...
Hits: 55504
0
Continue reading 0 Comments

Two experts in trucking company acquisitions predicted this week that we are in store for an upswing in industry consolidation in 2012.  This was one of the highlights of the Driving for Profit event that was held in Mississauga this past week.   Lou Smyrlis, Editorial Director of Canadian Transportation & Logistics interviewed two gentlemen who play significant roles in these types of activities, Doug Nix, Vice Chairman of Corporate Finance Associates and Doug Davis, Independent Director, Pro-Trans Ventures Inc.

In the initial stages of the interview, Lou asked these gentlemen about why we did not see more consolidation during the recent recession. The key takeaway from this discussion was that during this difficult period, trucking companies hunkered down into a “survival mode.”   The recession created devaluations of trucking company businesses.  Most truckers decided to tough it out until valuations improved.  Lenders, who saw trucking as a core industry, chose to support the industry until economic conditions improved.

The two investment advisors now believe that M & A activity will now increase.  They base this conclusion on the fact that after a 3 year hiatus, there is a pent-up demand.  There is a “ton of cash” waiting to be invested.  Balance sheets are healthy again.  During the recession, many trucking companies right-sized their businesses.  Investors will now see more efficient, stable businesses. 

Demographics will also play a part as many baby boomers who are seeking an exit strategy are three years older and their timetable for leaving the industry is now shorter.  We now have willing buyers, sellers and bankers.  While the two gentlemen do not predict a “feeding frenzy,” they do expect to see a doubling in the volume of trucking company acquisitions as compared to what we saw the last three years.

Lou then asked these advisors about the types of deals we are likely to see.  They expressed the view that there will likely be more “bolt-ons” where companies seek to expand a core business.  These types of deals allow companies to “improve overheads, bring margins into line” and “reduce dependence: on certain “key customers.”  When asked a question about whether we can expect to see a blockbuster deal like the Yellow-Roadway merger in the U.S., Doug Nix made the observation that the money would be there if the right plans with the right people are put in place.  However he opined that he does not think Canadians have the “chutzpah” to make a deal of this nature.

...
Hits: 23395
0
Continue reading 0 Comments

Most Recent Posts

Search


Tag Cloud

freight cost savings transportation audit driver pay technology Transcom Fleet Leasing Transport Capital Partners (TCP) capacity shortages truck driver CRM driverless US Economy General Motors Freight contracts Online grocery shopping Facebook Schneider Logistics shipper-carrier contracts NS Doug Nix Load Boards automation APL Transportation Canada David Tuttle Crisis management Muhammad Ali Impeachment President Obama Toronto Packaging Deferred Packaging trucking company acquisitions Finance and Transportation LTL Accessorial Charges CP Rail Geopolitics drones Tariffs shipping wine China Government Distribution Habs small business Search engine optimization Transportation Buying Trends Survey Trump cars Crude Oil by Rail intermodal Digital Freight Networks energy efficiency capacity shortage 3PLTL Social Media supply chain management USMCA CN Rail Wal-Mart Harper Davos speech derailments computer protection buying trucking companies Freight Matching dark stores computer security RFP cyber security shipping freight rate increases network optimization freight broker driver shortages Rail Dedicated Contract Carriage Training Hudsons Bay Company BlueGrace Logistics shipper-carrier collaboration Bobby Harris freight audit Keystone Pipeline New York Times US Manufacturing cheap oil consumer centric Swift Canadian Transportation & Logistics Transloading Failure natural disasters Value Proposition CITA Shipper Pulse Survey Truckload freight bid home delibery Freight Capacity Social Media in Transportation Freight Shuttle System employee termination economy US Election Global Transportation Hub Freight Carriers Association of Canada FCPC online shopping freight transportation conference NAFTA Freight Electric Vehicles risk management CSX 2013 Economic Forecast University of Tennessee recession FuelQuest FMCSA Celadon Emergent Strategy customer engagement Uber Freight Surety bond laptop Entrepreneur Broker truck capacity EBOR Associates Consulting broker security professional drivers Sales Management marketing Retail Grocery Trucking 2014 freight volumes transportation news Canadian economy Warehousing autos Montreal Canadiens economic outlook driver freight payment peak season Justice Colilers International CSA Success Leafs Railway Association of Canada 2014 freight forecast Shipper Freight Recession FCA the future of transportation mentoring Omni Channel CSA scores Fire Phone Horizontal Supply Chain Collaboration Retail transportation Load broker Blockchain Global experience Canada's global strategy Trucker Protest bulk shipping dynamic pricing Reshoring Infrastructure rail safety Job satisfaction freight payment freight audit home delivery Rotman School of Business selling trucking companies Career Advice Blogging Scott Monty Sales Strategy solutions provider Life Lessons Climate Change Donald Trump autonomous vehicles Training New Hires Hockey Loblaw digital freight matching financial management CN broker bonds MBA hiring process freight RFP freight transportation in 2011 Canadian freight market KCS Tracy Matura 2014 economic forecast UP NMFC fuel surcharge Software Advice Twitter Covid-19 Conway transportation newspaper Business skills Transportation service Derek Singleton Masters in Logistics Comey freight marketplace BNSF freight agreements US Auto Sales truck drivers MPG Cleveland Cavaliers JB Hunt Anti-Vax Toronto Maple Leafs Business Strategy LinkedIn Driver Shortage Freight Management Werner Dan Goodwill Sales 2015 Economic Forecast tanker cars Business Development Dedicated Trucking Whole Foods Stephen Harper Trade Vision Outsourcing Sales trade IANA last mile delivery Microsoft economic forecasts for 2012 $75000 bond Rate per Mile Regina FMS coaching US Housing Market shipper-carrier roundtable robotics Spanx NCC business security Amazon freight transportation Canada-U.S. trade agreement YRC Inbound Transportation 2012 Transportation Business Strategies. Jugaad TMP Worldwide Digitization Transplace 360ideaspace Success failure entrepreneur Doug Davis small parcel Driving for Profit Leadership asset management Canadian truckers Otto pipelines Education routing guide 3PL Adrian Gonzalez Sales Training e-commerce Coronavirus Freight Rates Canada U.S. trade dimensional pricing TMS carrier conference YRCW future of freight industry Management Canadian Protests freight forwarders USA Truck freight costs Right Shoring Carriers LCV's business start-up TransForce Yield Improvement Business Transformation Strategy Map-21 computer Ferromex ProMiles Politics ELD ShipMax

Blog Archives

March
February
December
October
September
August
June
May
April
March
January