November 2016 - Hyde Park · PDF fileNovember 2016 HYDE PARK CAPITAL ... The Apex Group acquired by Kerry Logistics Network Ltd. (SEHK:636) ... Caito Food Service, Inc

Transportation & Logistics M&A Report November 2016

HYDE PARK CAPITAL

Member FINRA/SIPC

Investment Banking | Mergers & Acquisitions | Capital Raising

Hyde Park Capital Advisors, LLC 701 N. Franklin Street

Tampa, FL 33602 Tel: 813-383-0202

www.hydeparkcapital.com

John Hill Senior Managing Director [email protected] (813) 383-0205 John McDonald Senior Managing Director [email protected] (813) 383-0206 Keith Hodgdon Managing Director [email protected] (813) 383-0208 Greg Bosl Vice President [email protected] (813) 597-2649 Jami Gold Vice President [email protected] (813) 383-0203 Jeffrey Hendricks Vice President [email protected] (678) 523-3073 Kenneth Burnside Business Development Officer [email protected] (864) 905-9633

HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising

Industry Sector 3 Months 12 months Revenue EBITDA

Logistics: Asset-Light (1.0%) (0.5%) 0.7x 11.6x

Logistics: Asset Based 2.7% 5.2% 1.1x 9.5x

Truckload 0.0% 5.1% 0.9x 6.4x

Less-than-Truckload 6.1% 11.8% 0.9x 5.6x

Median

Change in Stock Price Enterprise Value / LTM

Offer Date Issuer Industry Sector

Transaction

Type

Transaction

Value ($mm)

11/01/16 Ryder System, Inc. Logistics Fixed-Income $299

10/19/16 United Parcel Service, Inc. Logistics Fixed-Income $1,543

07/14/16 Nippon Express Co. Ltd. Trucking Fixed-Income $190

06/27/16 Kansas City Southern Railroads Fixed-Income $2,088

06/13/16 Jack Cooper Holdings Corp. Trucking Fixed-Income $375

06/06/16 TTX Company, Inc. Railroads Fixed-Income $350

05/31/16 Norfolk Southern Corp. Railroads Fixed-Income $597

80%

90%

100%

110%

Oct-15 Jan-16 Apr-16 Jul-16 Oct-16

S&P 500 Transportation & Logistics

Capital Markets Overview

2

Public Market Performance (LTM)

Select Public Offerings – Transportation & Logistics

Public Company Market Performance by Sector

Source: S&P Capital IQ

During the last twelve month period ended October 31, 2016; the S&P 500 increased 1.1%, while the Transportation and Logistics Index gained 4.5%.

The table on the right illustrates select public offerings recently

completed in the Transportation & Logistics (“T&L”) industry. As seen in the chart to the right, companies continue to take advantage of low interest rates and issue additional debt.

The Asset Light Logistics and Asset Based Logistics sectors were the industry’s leaders with respect to valuation, trading at EBITDA multiples of 11.6x and 9.5x, respectively.

Commentary

1.1%

4.5%


15%

34%36%

15% Asset-Light Logistics

Asset Based Logistics

Truckload

LTL

8.2x 8.3x

10.0x

7.3x

10.2x

7.0x

8.6x

6.7x

8.0x 8.1x

9.4x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD'16

U.S. M&A Activity – Annual Trends: VOLUME

U.S. M&A Activity: SECTOR BREAKDOWN (YTD 10/31/2016) U.S. M&A Activity – Annual Trends: EV/ EBITDA Multiples

Med

ian

EV

/ E

BIT

DA

Mu

ltip

le

M&A Market Summary – Transportation & Logistics

3

As illustrated in the chart to the right, M&A activity, or deal volume, decreased 29% to 72 closed transactions during the year-to-date (“YTD”) period ended October 31, 2016, down from 102 transactions during the same prior year period.

Although deal volume has fallen during 2016, the median EV/EBITDA transaction multiples increased to 9.4x YTD 2016, up from 8.1x in 2015.

The Truckload sector accounted for 36% of the deal volume completed within the T&L industry in 2016, while Asset-Based Logistics accounted for 34% and both Asset-Light Logistics and Less-than-Truckload sectors represented 15%.

Commentary

Source: S&P Capital IQ – Closed Transactions.

To

tal T

ran

sact

ion

Vo

lum

e

Median: 8.2x

119122

128

80

88

121

144

108 110

121

102

72

0

20

40

60

80

100

120

140

160

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD '15 YTD '16


Gardner Trucking, Inc. acquired by CRST International, Inc. Closed Date: September 16, 2016 ($ in millions)

Total Transaction Size NA

Revenue NA

EBITDA NA

Target / Buyer Transaction Analysis

Announced Date: November 4, 2016 ($ in millions)

Total Transaction Size

Revenue

EBITDA

SpartanNash (NasdaqGS:SPTN) announces acquisition of Caito Foods Service and Blue Ribbon Transport


$230

NA

NA

Span-Alaska Transportation, Inc. acquired by Matson, Inc. (NYSE:MATX)Closed Date: August 4, 2016 ($ in millions)

Total Transaction Size $198

Revenue NA

EBITDA 9.4x


Observations: Span-Alaska Transportation provides LTL freight transportation and was acquired by Matson Logistics, Inc. The acquisition expands on Matson Logistics' current platform in the Pacific and allows Matson to add significant revenues by strengthening its freight forwarding business in Alaska. Additionally, the acquisition is expected to be accretive to Matson Logistics' earnings per share.

Profiled Transaction



Profiled Transactions – Transportation & Logistics

4


Source: S&P Capital IQ

Observations: Gardner Trucking is a premier, California-based truckload carrier and logistic provider specializing in drayage and warehouse services. The acquisition allows CRST International, a provider of transportation and logistic services, to enhance its service offerings to its customers through Gardner’s warehousing and drayage services. The acquisition is also expected to enhance operating efficiencies and fleet utilization.

Observations: Caito Foods Service is a distributor of fresh produce and its affiliate, Blue Ribbon Transport ("BRT") offers temperature-controlled distribution and logistic services. SpartanNash’s acquisition enables it to grow its presence in the fresh produce grocery segment as Caito Foods and BRT's operations are complimentary to SpartanNash as it further strengthens its current distribution footprint and allows for cross-selling new offerings to existing customers.

The Apex Group acquired by Kerry Logistics Network Ltd. (SEHK:636)Closed Date: June 1, 2016 ($ in millions)

Total Transaction Size $88

Revenue NA

EBITDA NA


Observations: The Apex Group provides ocean to air freight, customs brokerage and logistics solutions. Kerry Logistics Network, a Hong Kong based third-party logistics provider, acquired The Apex Group to further expand its international freight forwarding footprint and to achieve better cost optimization for customers of both companies. Additionally, the combined company will achieve cross-selling opportunities through a more comprehensive network post-acquisition.


Announced

Date Target Target Description Buyer/Investor

Enterprise

Value ($mm)

11/04/16Caito Food Service, Inc. / Blue Ribbon Transport, Inc.

Operates as a food distributor. SpartanNash Co. $232.9

10/27/16 Transportation Resources, Inc. Provides truckload and less-than-truckload freight brokerage services. TransForce, Inc. $558.0

10/26/16 TTS, LLC Provides transportation and supply chain management services. Sunteck Transport Group, Inc. NA

10/04/16 Golden State Overnight Delivery Service Provides ground and overnight delivery services. General Logistics Systems B.V. $90.0

10/04/16 Atlantic Logistics, Inc. Offer dry van, flatbed, refrigerated, partial and less-than-truckload services. Epes Logistics Services, Inc. NA

09/20/16 Farren International, LLC Provides transportation and rigging services to various industries. EZE Trucking, LLC NA

09/19/16 Agri-Carriers Group, Inc. Provides bulk liquid transportation services to food industry. The Kenan Advantage Group, Inc. NA

09/13/16 C & V Trucking Co., Inc. Offers trucking and logistics services. RoadOne, Inc. NA

09/12/16 Gardner Trucking, Inc. Provides line haul, dedicated equipment, and logistics services. CRST International, Inc. NA

09/07/16 Nolan Transportation Group, Inc. Offers freight brokerage services. Ridgemont Equity Partners NA

09/02/16 Logistics & Distribution Services Corp. Operates as a transportation and logistics company in Nevada. ABF Logistics II, Inc. $25.0

08/30/16 ShipXpress, Inc. Provides cloud-based software solutions to assist supply chain partners. GE Transportation NA

08/08/16 United Express Service, Inc. Provides trucking and freight shipping services. NFI Global, LLC NA

08/03/16 Crown Moving Co, Inc. Comprises the business division that offers moving, relocation, and storage services. Bekins Moving & Storage Co. NA

08/01/16 EPIC Logistics, Inc. Operates as a third party logistics company in the United States. Epes Logistics Services, Inc. NA

07/26/16 Amerijet Holdings, Inc. Provides multi-modal cargo transportation and logistics services. ZS Fund L.P. NA

07/25/16 St. George Trucking & Warehouse, Inc. Provides ocean and air container freight station (CFS), distribution, & transportation Wind Point Partners NA

Recent M&A Activity – Transportation & Logistics

Select Announced M&A Transactions

5

Source: S&P Capital IQ.


Announced

Date Target Target Description Buyer/Investor

Enterprise

Value ($mm)

07/20/16 Sterling Solutions, LLC Provides strategic and tactical improvement solutions to supply chain issues. Savills Studley, Inc. NA

07/18/16 Span-Alaska Transportation, Inc. Provides LTL freight transportation and freight forwarding services to and from Alaska. Matson Logistics, Inc. $197.6

07/07/16 Global Transportation Services, Inc. Provides air & ocean import/export, customs brokerage, transportation, and cargo services. American Fast Freight, Inc. NA

06/28/16 Buesing Bulk Transport, Inc. Provides bulk transportation services in the United States and Canada. Foodliner, Inc. NA

06/15/16 Mats Trucking, Inc. Provides transportation, freight, and distribution services. Moran Transportation Corp. NA

06/09/16 American Global Logistics, LLC Offers customized logistics solutions. Constitution Capital Partners, LLC NA

06/01/16 The Apex Group Provides ocean and air freight, customs brokerage, logistics, and door-to-door delivery services. Kerry Logistics Network Ltd. $172.4

05/12/16 Clancy's Transfer and Storage, Inc. Provides commercial and residential moving services. Bekins Moving & Storage Co. NA

04/27/16 FDSI Logistics, Inc. Provides third-party logistics and freight management services to businesses. Cardinal Health, Inc. NA

04/21/16 Pak Mail Centers of America, Inc. Provides packing and shipping services in the United States and internationally. Annex Brands, Inc. NA

03/14/16 Coastal Pacific Xpress, Inc. Provides temperature-controlled carrier services. VersaCold International NA

03/04/16 Blue-Grace Logistics, LLC * Provides freight shipping and transportation management services. Warburg Pincus, LLC NA

03/07/16 Kings Express Provides trucking and freight management services. Mobile Air Transport, Inc. NA

02/11/16 Advanced Distribution Services Provides cross docking facilities for logistic services. Dicom Transportation Group NA

02/06/16 FLS Transportation Services, Inc. Provides transportation logistics solutions for small to large companies. ABRY Partners NA

02/02/16 Global Distribution and Logistics LLC Provides freight transportation services. Rockfarm Supply Chain Solutions NA

01/12/16 EZ Alternative Transport, LLC Offers bulk liquid transportation through trucks. Heniff Transportation Systems NA

01/12/16 Enroute Systems Corporation Provides supply chain management and SaaS solutions. Pitney Bowes, Inc. $14.0

Recent M&A Activity – Transportation & Logistics

Select Announced M&A Transactions

6

* Denotes Hyde Park Capital transaction Source: S&P Capital IQ.


70%

80%

90%

100%

110%

120%


S&P 500 Less-than-Truckload

80%

90%

100%

110%


S&P 500 Truckload

80%

90%

100%

110%


S&P 500 Asset-Light Based Logistics

80%

90%

100%

110%


S&P 500 Asset Based Logistics

Industry Sector Overview – Recent Stock Price Performance

Truckload

Asset-Light Logistics

7

Asset Based Logistics

Less-than-Truckload

Source: S&P Capital IQ. Note: See pages 8-9 for comparable groups.

1.1%

1.1%

5.2%

1.1%

1.1%

0.5%

5.1% 11.8%


Industry Sector Overview – Public Company Analysis

Logistics: Asset-Light

($ in millions, except per share)

8

Logistic Providers

Logistics: Asset Based

Source: S&P Capital IQ.

Closing Price % of 52 Equity Enterprise

Company Ticker 10/31/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA

Kuehne + Nagel International AG KNIN $135.67 93% $16,269 $15,714 $17,071 $6,747 $1,095 39.5% 6.4% 0.9x 14.3xCH Robinson Worldwide, Inc. CHRW $68.12 90% $9,781 $10,521 $12,940 $1,214 $919 9.4% 7.1% 0.8x 11.5x

Expeditors International of Washington, Inc. EXPD $51.47 98% $9,463 $8,486 $6,052 $894 $722 14.8% 11.9% 1.4x 11.7xPanalpina World Transport Holding Ltd. SWX:PWTN $129.91 92% $3,091 $2,755 $5,476 $1,478 $145 27.0% 2.6% 0.5x 19.1xForward Air Corp. FWRD $41.32 82% $1,264 $1,299 $974 $252 $140 25.8% 14.4% 1.3x 9.3x

Hub Group, Inc. HUBG $36.45 86% $1,260 $1,241 $3,485 $451 $171 12.9% 4.9% 0.4x 7.2xEcho Global Logistics, Inc. ECHO $21.20 74% $630 $790 $1,716 $327 $52 19.0% 3.0% 0.5x 15.2x

Roadrunner Transportation Systems, Inc. RRTS $7.60 31% $290 $689 $1,972 $391 $102 19.8% 5.1% 0.3x 6.8x

Average 81% $5,256 $5,187 $6,211 $1,469 $418 21.0% 6.9% 0.8x 11.9x

Median 88% $2,178 $2,027 $4,480 $673 $158 19.4% 5.8% 0.7x 11.6x

Enterprise Value /

LTM LTM Margins LTM



United Parcel Service, Inc. UPS $107.76 96% $96,095 $106,133 $60,029 $14,723 $10,161 24.5% 16.9% 1.8x 10.4x

FedEx Corp. FDX $174.32 103% $47,894 $58,687 $52,749 $15,076 $7,742 28.6% 14.7% 1.1x 7.6xDeutsche Post AG XTRA:DPW $30.94 97% $39,224 $44,313 $66,293 $26,087 $4,540 39.4% 6.8% 0.7x 9.8x

JB Hunt Transport Services, Inc. JBHT $81.61 91% $9,307 $10,245 $6,455 $1,277 $1,078 19.8% 16.7% 1.6x 9.5xDSV A/S DSV $48.39 97% $8,909 $10,211 $9,470 $2,214 $583 23.4% 6.2% 1.1x 17.5x

Ryder System, Inc. R $69.39 78% $3,701 $9,145 $6,731 $1,511 $1,814 22.4% 27.0% 1.4x 5.0xXPO Logistics, Inc. XPO $32.93 80% $3,615 $9,065 $14,285 $2,083 $1,103 14.6% 7.7% 0.6x 8.2x

Average 92% $29,821 $35,400 $30,859 $8,996 $3,860 24.7% 13.7% 1.2x 9.7x

Median 96% $9,307 $10,245 $14,285 $2,214 $1,814 23.4% 14.7% 1.1x 9.5x

Enterprise Value /

LTM LTM Margins LTM




Old Dominion Freight Line, Inc. ODFL $74.68 102% $6,250 $6,453 $2,980 $900 $665 30.2% 22.3% 2.2x 9.7x

Landstar System, Inc. LSTR $71.15 98% $3,022 $2,943 $3,125 $689 $253 22.1% 8.1% 0.9x 11.6x*YRC Worldwide, Inc. YRCW $8.88 45% $292 $1,060 $4,692 $505 $243 10.8% 5.2% 0.2x 4.4x

Saia, Inc. SAIA $35.65 86% $911 $1,049 $1,206 $228 $153 18.9% 12.7% 0.9x 6.9x

ArcBest Corp. ARCB $19.90 60% $523 $561 $2,660 $176 $132 6.6% 4.9% 0.2x 4.3x

Average 78% $2,199 $2,413 $2,933 $500 $289 17.7% 10.6% 0.9x 6.3x

Median 86% $911 $1,060 $2,980 $505 $243 18.9% 8.1% 0.9x 5.6x

Enterprise Value /

LTM LTM Margins LTM



JB Hunt Transport Services, Inc. JBHT $81.61 91% $9,307 $10,259 $6,455 $1,277 $1,078 19.8% 16.7% 1.6x 9.5xSwift Transportation Co. SWFT $22.38 95% $3,081 $4,242 $4,083 $804 $548 19.7% 13.4% 1.0x 7.7x

Landstar System, Inc. LSTR $71.15 98% $3,022 $2,943 $3,125 $689 $253 22.1% 8.1% 0.9x 11.6x*Knight Transportation, Inc. KNX $29.25 96% $2,374 $2,432 $1,120 $344 $264 30.7% 23.6% 2.2x 9.2xWerner Enterprises, Inc. WERN $24.05 82% $1,742 $1,873 $2,019 $536 $338 26.5% 16.7% 0.9x 5.5x

Heartland Express, Inc. HTLD $18.40 84% $1,542 $1,441 $647 $242 $185 37.4% 28.5% 2.2x 7.8xCeladon Group, Inc. CGI $6.50 31% $183 $712 $1,064 $174 $97 16.4% 9.1% 0.7x 7.3xMarten Transport Ltd. MRTN $20.50 93% $673 $677 $667 $191 $131 28.7% 19.7% 1.0x 5.2xCovenant Transportation Group, Inc. CVTI $15.99 62% $292 $490 $688 $172 $113 25.1% 16.4% 0.7x 4.3x

P.A.M. Transportation Services, Inc. PTSI $19.70 40% $135 $278 $427 $80 $56 18.8% 13.1% 0.7x 5.0xUSA Truck, Inc. USAK $8.23 35% $75 $207 $444 $76 $38 17.1% 8.5% 0.5x 5.5x

Average 73% $2,039 $2,323 $1,885 $417 $282 23.8% 15.8% 1.1x 6.7x

Median 84% $1,542 $1,441 $1,064 $242 $185 22.1% 16.4% 0.9x 6.4x

Enterprise Value /

LTM LTM Margins LTM

Industry Sector Overview – Public Company Analysis

Truckload

($ in millions, except per share)

9

Trucking

Source: S&P Capital IQ. *Excluded from the average and median calculation.

Less-than-Truckload


Overview of the Transaction

Warburg Pincus made a growth equity investment in BlueGrace Logistics, LLC.

Founded in 2009, BlueGrace is one of the fastest growing leaders of transportation management services in North America. As a full service third-party logistics provider (3PL), BlueGrace helps businesses manage their less-than-truckload and truckload spend through industry leading technology, high level freight carrier relationships and superior insight of the complex U.S. freight industry. BlueGrace is headquartered in Riverview, Florida.

Hyde Park Capital’s Role

Hyde Park Capital was engaged as the exclusive investment banker and financial advisor to BlueGrace in connection with the investment in the Company.

Hyde Park Capital advised BlueGrace throughout the process and negotiated and closed the transaction with Warburg Pincus, LLC.

10

Warburg Pincus, LLC Makes Investment in BlueGrace Logistics, LLC

Hyde Park Capital Featured Transaction

has received a growth equity

investment from:


Member FINRA/SIPC

Recent Transactions

HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising Integrity | Expertise | Results

Hyde Park Capital Advisors, LLC 701 N. Franklin Street

Tampa, FL 33602 Tel: 813-383-0202

www.hydeparkcapital.com

John Hill Senior Managing Director [email protected] (813) 383-0205 John McDonald Senior Managing Director [email protected] (813) 383-0206 Keith Hodgdon Managing Director [email protected] (813) 383-0208 Greg Bosl Vice President [email protected] (813) 597-2649 Jami Gold Vice President [email protected] (813) 383-0203 Jeffrey Hendricks Vice President [email protected] (678) 523-3073 Kenneth Burnside Business Development Officer [email protected] (864) 905-9633

has been acquired by

a portfolio company of

has been acquired byhas been acquired byhas been acquired by


a part of

MTS Markets International Inc.


has been acquired byhas been acquired byhas been acquired by

has been acquired byhas been recapitalized by

Minera del Norte S.A. de C.V.

has been recapitalized by

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Documents

November 2016 - Hyde Park · PDF fileNovember 2016 HYDE PARK CAPITAL ... The Apex Group acquired by Kerry Logistics Network Ltd. (SEHK:636) ... Caito Food Service, Inc