Heartland Buys Interstate Distributor From Saltchuk for $113 Million
Heartland Express Inc. has purchased Interstate Distributor Co. from owner Saltchuk Resources Inc. in a $113 million deal that is the latest in a flurry of mergers and acquisitions in 2017.
The transaction consists of $94 million in cash to purchase all the shares of Interstate Distributor, $4 million in cash on Interstate’s balance sheet and the assumption of about $23 million of Interstate’s debt, which Heartland will pay off after the close, according to a statement.
Heartland and Interstate rank Nos. 41 and 67, respectively, on the Transport Topics Top 100 list of the largest North American for-hire carriers.
The acquisition continues a wave of consolidation within the trucking industry, which includes a proposed multibillion-dollar deal between Knight Transportation Inc. and Swift Transportation struck in April and Hub Group’s purchase of Estenson Logistics for $306 million in May.
“With a strong operating base and confidence in the future, we have been carefully evaluating several acquisition candidates and ranked IDC at the top because of the direct path to achieving synergies,” Heartland CEO Michael Gerdin said. “Additionally, IDC is an excellent operational fit, as its terminal network has nearly direct overlap with our current locations. Heartland will gain significant additional traffic density in the West, and our stronger eastern network will improve service for IDC’s customers in the East.”
Interstate Distributor’s truckload business generated about $325 million in total revenue in 2016, according to Heartland. Its fleet consists of 75% dry van and 25% refrigerated trucks.
“Since acquiring IDC in 2012, we have made significant investments in IDC’s fleet, personnel and business practices. We are very proud of the advancements in safety and customer service on our watch and we appreciate the efforts of IDC’s management to improve the business,” said Mark Tabbutt, chairman of Saltchuk. “Ultimately, we decided to look for a new home for Interstate to allow us to focus investment in other areas of our business. Heartland offered not only a strategic fit for the business that would allow it to grow, but a good cultural match for the team.”