ArcBest adds to logistics division with $25 million acquisition of Nevada-based company
by September 2, 2016 1:59 pm 990 views
Fort Smith-based ArcBest is beefing up its ABF Logistics division with a $25 million deal to acquire Logistics & Distribution Services (LDS). The move could add $60 million in annual revenue to the transportation and logistics holding company. The largest subsidiary of ArcBest is ABF Freight, one of the nation’s largest less-than-truckload carriers.
Sparks, Nev.-based LDS has 30 employees and was founded in 2001. The deal includes a $17 million payment on closing, and $8 million in escrow tied to “certain financial targets over the next two years,” according to the ArcBest press release.
“This acquisition complements our business nicely by adding to our existing services, specifically in deploying dedicated capacity, which will increase the breadth of our available solutions for customers,” ABF Logistics President Jim Ingram said in the statement released Friday (Sept. 2). “We like the customer-centric model LDS has built. This purchase is another important step in our strategy to seamlessly provide customers with the full logistics services they require and grow the percentage of total revenue that comes from the asset-light businesses operated by ArcBest.”
LDS Founder, President and CEO Ross Kline will remain and manage the ABF Logistics branches in Sparks and Allentown, Pa.. Kline has been in the industry almost 35 years, with 25 years in a dedicated brokerage model.
“This is a perfect alignment of two unique logistics providers,” said Kline. “Our current and future customers will have more solutions available with the combination of LDS and the ABF Logistics team. We look forward to joining ABF Logistics and the broader ArcBest organization, including ABF Freight and Panther Premium Logistics.”
LDS is the third addition to ABF Logistics since the division was created in 2013. The company purchased Plano, Texas-based Bear Transportation Services in December 2015 and Oklahoma City-based Smart Lines Transportation Group in January 2015.
The revenue boost could help ArcBest. For the first half of 2016, the company posted net income of $4.128 million, below the $20.712 million in the same period of 2016. Revenue in the first six months totaled $1.298 billion, down from $1.309 billion in the same period of 2016, according to the second quarter earnings report released July 29.
The operating income for ABF Logistics for the first half of 2016 was $1.162 million, well below the $2.583 million in the same period of 2015.