- Heartland Express announced its acquisition of dry van TL carrier Smith Transport for $170 million on Wednesday.
- Heartland spent a separate $14 million in cash to purchase Smith’s trucking terminal and 375,000 square feet of warehouse space in Roaring Spring, Pennsylvania, which is leased to tenants.
- “We were attracted to this opportunity for three main reasons: the safe and experienced professional drivers, the high level of service offered to a blue-chip customer base, and the management depth that demonstrates the ability to continue operating independently and profitably,” Michael Gerdin, Heartland Express chairman, president and CEO, said in a statement.
Transport-related M&A, underway with gusto last summer, have continued as companies pursue a more holistic portfolio. Carriers TFI and Werner acquired reefer and final-mile capacity last fall. Knight-Swift Transportation, which made two big acquisitions to secure a foothold in the LTL space in 2021, is ready and looking to make more acquisitions as it looks to spend free cash, executives said in a Q1 call.
For Heartland, the deal is the second major acquisition in the past three years. The company purchased dry van TL carrier Millis Transfer, based in Black River Falls, Wisconsin, for $150 million in August 2019.
The acquisition of Smith will allow the 40-year-old, asset-based TL carrier to invest in its headquarters and retain Todd Smith as president, according to the announcement. The company primarily serves eastern U.S. with terminal locations in Pennsylvania, Georgia and Indiana, and it hauls for Fortune 500 firms including expedited transportation integrators, retailers, beverage makers and home supply companies.
Heartland Express wants to “keep Smith the same company that is attractive to customers, drivers, and other personnel, while using our scale to offer better purchasing, more depth, and advantageous cost savings,” Gerdin said.
The Smith fleet consists of about 850 company tractors with an average age of less than three years and about 2,000 dry van trailers, according to the company.
Heartland’s regional presence, its respect for its drivers and high level of customer service made the deal appealing to Smith, Todd Smith said. Its ability to pay cash “and the desire for Smith to remain an independent brand operated by the same people” made the choice clear, he said.
“As an employee-owned company, our goal was to find the best value and the best home for our people for years to come,” Smith said.
Smith’s founder and chairman emeritus, Barry Smith, added that Heartland will provide the company long-term stability and the chance to grow as part of an industry leader, “while retaining our own culture and identity.”
“I could not have found a better home than Heartland for the Smith family,” he said.