- Werner closed on a deal with ECM Transport Group for $142 million, acquiring 80% of the company while also getting the exclusive option to buy the remaining 20% in the next five years. It is Werner's first TL acquisition, said Derek Leathers, Werner chairman and CEO.
- The acquisition adds 500 drivers to Werner, the company said, as well as 500 tractors and 2,000 trailers. Werner is the 17th largest for-hire carrier, according to Transport Topics' 2021 rankings made before the deal. Werner reported having nearly 12,300 employees, 7,900 tractors, and more than 24,400 trailers. ECM Transport has skilled, tenured drivers and low turnover, Werner said.
- The acquisition allows Werner to add density and new clients and opportunities to the Ohio, Mid-Atlantic and Northeast regions, according to Leathers, who spoke to investors and analysts on Friday.
As e-commerce surges, it presents two challenges. One is the increasing volume. TL and LTL companies are struggling to hold on to their drivers as the North American economy rebounds.
But the second challenge is likely one Werner sought to address with its acquisition of ECM Transport: Hauls are getting shorter and more voluminous, and shippers and consumers expect speedy freight delivery. Leathers told analysts the regional nature of ECM Transport, which will continue to stand alone within Werner, will help Werner increase its exposure to "high-velocity, shorter length-of-haul TL shipments, with high-frequency driver home time."
Werner is especially eager to hold on to drivers in a time of high turnover and a pandemic-sharpened shortage. Leathers told investors in May that Werner would focus on driver recruitment and retention by investing in better equipment. The growing emphasis on home time is also likely to please drivers.
The ECM Transport acquisition is a way for Werner to check off a few goals with one transaction, and it fits into what Leathers calls Werner's "5 T" strategy in acquisitions. The emphasis is on trucks, talent, technology, trailers and terminals, he said.
The $142 million purchase gets Werner more experienced drivers, many of whom are used to daily home time. It gets Werner more advanced trucks, with an average age of three years. It gets Werner more terminals, more customers, more yards and more revenue.
Leathers said Werner will be able to fit ECM Transport easily into its existing nationwide network. Leathers said the acquisition will grow Werner's fleet by 6%. ECM Transport will add 18 drop yards and eight terminals to Werner's networks.
Werner is not known for its M&A strategy. ECM Transport is the company's first TL acquisition and the first major acquisition in more than 65 years, according to Werner.
Leathers took over as chairman in May, and a more aggressive strategy is now fully engaged at a time when acquiring more capacity makes it easier to meet shipper demand. Leathers told analysts that the ECM Transport takeover will signal to the marketplace that Werner is interested in acquiring more TL capacity.