Covenant Transport Services Acquires Landair Holdings
Covenant Transport Services has acquired Landair Holdings Inc. of Greeneville, Tenn., for $83 million in cash and the assumption of $15.5 million in debt.
Landair is the parent of Landair Transport, a dedicated truckload carrier with a fleet of 430 trucks and 900 trailers, and Landair Logistics, a company that operates 12 distribution facilities and 1.8 million square feet of warehousing space.
Covenant Chairman and CEO David Parker said Landair will operate as part of the company’s truckload segment, which includes Covenant Transport, Star Transportation and Southern Refrigerated Transport. Other Covenant units offer freight brokerage and equipment leasing services.
Started in 1981 by Scott Niswonger and Ed Sayler, Landair specialized in hauling air cargo over the road and evolved into a major provider of dedicated contract carriage services for shippers. The company generated $121 million in revenue in 2017, with $60 million coming from dedicated truckload operations, $41 million from warehousing and managed freight services and $20 million from one-way truckload operations.
Besides his involvement with Landair, Niswonger, a former corporate pilot and executive at Flying Tiger Lines, founded Forward Air Corp., a publicly traded freight carrier that also specializes in hauling air cargo to and from airports.
Covenant’s purchase of Landair brings an end to a long-running partnership between Niswonger and John Tweed, who served as CEO of Landair since 2000 and is expected to say on as president after the acquisition. Tweed and Niswonger originally were partners in Warehouse Logistics, a contract distribution business that later merged into Landair.
“Today is the start of the next chapter in the Landair story,” Niswonger said in a statement July 5. “We are blessed to have identified a strategic buyer that was founded on faith-based principles and is committed to continued investment in our business and people.”
An avid pilot who took his first flight lesson at the age of 12 and received his private pilot license on his 17th birthday, Niswonger received the Wright Brothers Master Pilot Award from the Federal Aviation Administration and earlier this year was awarded an honorary degree and served as commencment speaker for the Haslam College of Business at the University of Tennessee.
Tweed said the deal with Covenant will give Landair and its customers a boost. “Continued growth at the pace we are experiencing requires access to the resources and support of a strong partner,” he said.
Covenant’s Parker described Landair as “a perfect fit” to help the company expand its services and to “get closer and more heavily integrated with customers.”
In addition, Parker said, “We believe the backing of Covenant will provide additional resources to expand Landair’s dedicated truckload operations [and] improve profit margins through identified cost synergies.”
Parker emphasized that Landair will maintain its offices in Greeneville with little or no change in employees or customers.
Covenant officials said they expect the acquisition of Landair to add between 4 cents and 8 cents per share to net income in the second half of 2018 and between 16 cents and 20 cents a share in 2019. The company is funding the purchase with a combination of cash on hand and used revenue equipment financing.