Covenant buys Lew Thompson & Son Trucking for $100 million

Huntsville-based poultry carrier Lew Thompson & Son Trucking Inc. was recently acquired by Covenant Logistics Group Inc. for about $100 million. The acquisition was completed on April 26 amid a soft freight market.

The agreement with the Chattanooga, Tenn., logistics provider also includes an earnout of up to $30 million, depending on the performance of the acquired company over the next three years. In 2022, Lew Thompson & Son generated about $64 million in revenue.

“We are very pleased to welcome the entire Lew Thompson & Son team to the Covenant family,” said chairman and CEO David Parker. “We pursued Lew Thompson & Son because of their proven track record of operating a first-class dedicated contract carrier business in a niche market, which we believe has less sensitivity to economic cycles and opportunities to grow. We believe the backing of Covenant will provide additional resources to expand Lew Thompson & Son to best meet the needs of their strong customer base.”

Covenant announced the acquisition in its first-quarter earnings report on April 27. “We believe the acquisition is another strong step toward building a more diversified and resilient operating model,” Parker said.

In the first quarter, Covenant’s earnings declined by 25% to $16.63 million from $22.16 million in the same period last year. Revenue fell by 8.5% to $266.85 million from $291.58 million.

“We are pleased with our first quarter results and are excited about the opportunity Lew Thompson & Son gives us to improve upon them,” Parker added. “Our results were achieved in the midst of a very difficult operating environment that spanned across the entire quarter.”

Attempts to reach Josh Thompson, president of Lew Thompson & Son, were unsuccessful. According to the company’s website, the company has more than 230 trucks and 400 trailers. By comparison, Covenant had 2,040 trucks and 5,237 trailers as of March 31.