Werner Enterprises acquires Elite Regional Truckload
- Expands terminal, fleet and driver footprint in strategic mid-Atlantic, Ohio and northeastern regions
- Increases the fleet by more than 6%; increases regional short-haul freight coverage in these geographic markets
- Combines similar customer-centric cultures, Werner and ECM focus on the highest standards of safety and punctuality
- ECM achieved 2020 revenue of $ 108 million, with an operating margin of 19.8%; should be accretive to adjusted EPS in the first year
OMAHA, Neb., July 01, 2021 (GLOBE NEWSWIRE) – Werner Enterprises, Inc. (Nasdaq: WERN), one of the nation’s largest transportation and logistics companies, today announced the signing of a definitive agreement and closing of the acquisition of an 80% stake in ECM Transport Group (“ECM”) for a purchase price of $ 142.4 million and retains an exclusive option to purchase the remaining 20% of ‘ECM Transport Group after a period of five years. With revenues of $ 108 million in 2020, ECM consists of ECM Transport and Motor Carrier Services of Pennsylvania, which are elite regional carriers that operate nearly 500 trucks and 2,000 trailers in their network of 8 terminals and 18 deposit facilities.
“The addition of qualified drivers, non-driver associates and ECM’s terminal network strengthens our portfolio by adding short-haul expertise in a segment in which consumer demand and supply chain needs are increasing.” said Derek Leathers, Chairman, President and CEO. “This transaction delivers on our ‘5T + S’ strategy and will position us for further growth as we capitalize on positive market momentum for the remainder of 2021 and beyond. We expect this transaction to be profitable in the first year and anticipate cost synergies through the integrated management of our combined fleet. “
Strategic and financial advantages
Expands Presence in Strategic Mid-Atlantic, Ohio, and Northeastern Regions
- Complementary to the existing footprint of the Werner’s terminal
- Increased exposure to the 200-300-mile transportation segment, in support of continued expected growth in demand
Adds high quality talent and increases Werner’s fleet size by over 6%
- Addition of more than 500 highly qualified incumbent drivers in a tight labor market
- Fleet of nearly 500 trucks and 2,000 trailers
- Extremely low driver turnover
- Synergies expected thanks to combined fleet management
Combines similar cultures focused on safety and customer service excellence
- Highest standards in driver training and safe operation
- Continuous investment in technology and IT infrastructure to improve on-time delivery performance
- Shared values of selecting winning customers with high expectations, establishing long-term mutual revenue and service goals, and delivering best-in-class performance to stabilize volume and minimize churn
- Existing ECM leadership (including founder and chairman Ed Meier), drivers and non-driver associates will remain in place and we maintain the ECM brand to ensure smooth onboarding and high driver retention.
- ECM will operate as a stand-alone business unit within Werner and their financial results will be reported in the Werner’s One-Way Truckload unit within Truckload Transportation Services
Leathers continued, “Both companies strongly believe that our professional drivers are the backbone of our organizations. We look forward to welcoming the ECM team and working together to create added value for our customers and shareholders. “
“We are delighted to join the Werner’s team and look forward to continued growth while leveraging our collective strengths to serve our existing and new customers to even higher levels. We stand alongside our existing customers and will continue to provide them with excellent service. Werner shares our passion for creating value and continuously creating personal and professional opportunities for our accomplished team of professional drivers and non-driver associates, ”said Ed Meier, President of ECM.
Financing of transactions and conditions
Werner funded the transaction with a combination of cash, existing credit facilities and a new $ 100 million fixed rate term loan due May 2024 with BMO Harris Bank NA, one of the two lead banks. in line with Werner. The closing of the acquisition was completed today. The remaining 20% stake in ECM Transport Group will be retained by Ed Meier, founder and chairman of ECM. As previously mentioned, Werner Enterprises retains an exclusive option to purchase the remaining 20% of ECM Transport Group after a period of five years.
Conference Call Information
Werner Enterprises, Inc. will host a conference call to discuss the acquisition on Friday, July 2, 2021 at 8:00 a.m. CT. The press release, live webcast of the conference call and accompanying slide presentation will be available at www.werner.com in the “Investors” section under “News and Events”, then “Webcasts and Presentations”. “. To participate in the conference call, please dial (844) 701-1165 (national) or (412) 317-5498 (international). Please let the operator know that you are calling for the Werner Enterprises call. A replay of the conference call will be available from July 2, 2021 until August 2, 2021 by dialing (877) 344-7529 (national) or (412) 317-0088 (international) and using the code access 10158045. A replay of the webcast will also be available at www.werner.com in the “Investors” section under “News and Events”, then “Webcasts and Presentations”.
About Werner Entreprises
Werner Enterprises, Inc. (Nasdaq: WERN) provides premium truck transportation and logistics services to customers in the United States, Mexico and Canada. With 2020 sales of $ 2.4 billion, an industry-leading fleet of modern trucks and trailers, nearly 13,000 talented employees and our innovative Werner Edge technology, we are a supplier of essential solutions for customers who value the integrity of their supply chain and demand on-time service. Werner provides dedicated, one-way full truckload services as well as logistics services that include full load brokerage, freight management, intermodality and last mile. As an industry leader, Werner is deeply committed to promoting sustainability and supporting diversity, equity and inclusion.
About ECM Transport Group
ECM Transport Group (“ECM”), consists of ECM Transport, with approximately 450 trucks and headquartered in Cheswick, PA, and Motor Carrier Services of Pennsylvania, headquartered in Northwood, Ohio with approximately 50 trucks. They have been providing trucking services for over 30 years. Originally founded as a traditional full load transporter, ECM has branched out as a transportation solutions provider and technology innovator, committed to providing unique, high value and personalized solutions to its customers. ECM has a network of 8 terminals and 18 depots in the Mid-Atlantic, Ohio and Northeast regions.
Koley Jessen PC, LLO was Legal Counsel to Werner Enterprises. Saul Ewing Arnstein & Lehr LLP served as legal counsel to ECM Transport Group.
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and made in accordance with the provisions of the Safe Harbor of the Securities Litigation Reform Act of 1995, as amended. These forward-looking statements are based on information currently available to the management of the Company and are not up to date until the date of their publication. Actual results could also differ materially from those anticipated due to a number of factors including, but not limited to, those discussed in the Company’s Annual Report on Form 10-K for the year ended. December 31, 2020 and the quarterly report on Form 10-Q for the period ended March 31, 2021.
For these reasons, one should not place undue reliance on forward-looking statements. The Company assumes no obligation or obligation to update or revise any forward-looking statement, although it may do so from time to time if management considers it warranted or as required by applicable securities legislation. . These updates or revisions may be made by filing reports with the United States Securities and Exchange Commission, by issuing press releases, or by other methods of public disclosure.
John J. Steele
Executive Vice President, Treasurer
and financial director
Source: Werner Enterprises, Inc.