Werner Enterprises announced it has acquired privately owned dedicated trucking company FirstFleet for approximately $245 million in cash and will also buy certain real estate properties directly from FirstFleet. Including the real estate, Werner said the total consideration is approximately $282.8 million.
Werner said the deal is designed to expand its higher-margin Dedicated business within its Truckload Transportation Services segment and will make the company the fifth-largest dedicated carrier in the U.S. by power units. Werner also said the transaction is expected to be immediately accretive to earnings per share.
FirstFleet, headquartered in Murfreesboro, Tennessee, has operated for more than four decades and serves customers under multi-year contracts, with Werner noting an average 17-year tenure among FirstFleet’s top 10 customers. Werner said FirstFleet adds scale with approximately 2,400 tractors, 11,000 trailers, and 37 strategically located properties near roughly 130 customer sites nationwide. Werner said FirstFleet has capabilities across end markets, including grocery, bakery goods, and corrugated packaging.
Werner said FirstFleet generates more than $615 million in annual revenues and has consistent operating income margins. The company expects the acquisition to lift free cash flow, citing FirstFleet’s cash flow conversion, and projects about $18 million in annual synergies with greater earnings uplift expected within the first two years.
Strategically, Werner said the combination should accelerate its revenue mix shift toward long-term contractual Dedicated services. Werner expects Dedicated revenues to increase by about 50% with the addition of FirstFleet, while also expanding exposure to more resilient freight categories, including grocery and baked goods. Werner also pointed to increased network density, greater purchasing power, improved asset utilization, and stronger fixed cost absorption benefits from FirstFleet’s footprint across the eastern half of the U.S.
Werner said FirstFleet will operate as a business unit within Werner’s Truckload Transportation Services segment and will complement Werner’s existing Dedicated division. Werner plans to retain the majority of FirstFleet’s management team and keep FirstFleet’s headquarters in Murfreesboro.
Werner said it will fund the transaction using operating cash on hand and its existing revolving credit facility. Werner also announced it would hold a conference call and webcast to discuss the acquisition and provide an accompanying slide presentation.
Support: Advisors on the deal included Wofford Advisors LLC as Werner’s exclusive strategic advisor and Koley Jessen P.C., L.L.O. as legal counsel. Wells Fargo Securities and TD Securities provided financial advisory support to Werner, while Raymond James & Associates, Inc. served as lead financial advisor to FirstFleet alongside Brentwood Capital Advisors LLC. Scudder Law Firm P.C., L.L.O. served as legal advisor to FirstFleet.
KEY QUOTES
“Powered by the talent of our combined associates, this partnership comes at the ideal moment for our company. By uniting FirstFleet’s expertise in complementary new verticals with our resources and nearly 5,000 Dedicated trucks, we will improve our competitive position and accelerate profitable growth. We have found a strong cultural fit with a shared commitment to safety, service and innovation. Together, we are better positioned to drive tech-enabled solutions and deliver lasting value for our customers, drivers and shareholders.”
Derek Leathers, Chairman and CEO, Werner Enterprises
“We are confident that, with the addition of the FirstFleet team, Werner will be stronger and even better positioned to serve our loyal customers and capitalize on profitable growth opportunities as market conditions continue to improve.”
Derek Leathers, Chairman and CEO, Werner Enterprises
“Since 1986, FirstFleet has delivered exceptional growth by treating our team members and customers like family. In choosing to combine with Werner, we are joining a leader in our industry with a proud history of caring deeply about their associates and customers. Our team has long admired Werner’s leadership, and we strongly believe this transaction is an excellent opportunity to leverage best-in-class technology and deliver significant value to all our stakeholders.”
Paul Wilson, Owner, FirstFleet
