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January 2, 2020 2:00 PM, EST

J.B. Hunt Acquires RDI Last Mile

Experts Predict 2020 Merger, Acquisition Boom
J.B. Hunt truck on highwayJohn Sommers II for Transport Topics

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J.B. Hunt Transport Services Inc. acquired the assets of RDI Last Mile Co. on Dec. 31, marking the company’s latest purchase of a final-mile service. Terms were not disclosed in a Jan. 2 news release.

Lowell, Ark.-based J.B. Hunt, a supply chain company and carrier, is the parent company.

CEO John Roberts said the carrier sees opportunity in the growing field of home delivery of large items.

“Growing our final-mile delivery capabilities is a priority, and the acquisition of RDI further extends our expertise in furniture delivery,” Roberts said in a written statement.

RDI, based in South Easton, Mass., was founded in 1987, according to J.B. Hunt. The company generated annual revenue of $35 million, according to J.B. Hunt officials. RDI provides home delivery service of big and bulky products in the Northeast.

J.B. Hunt said RDI typically uses contract carriers to make furniture deliveries.

RDI is the company’s third acquisition in as many years. J.B. Hunt acquired Cory 1st Choice Home Delivery in 2019 and Special Logistics Dedicated in 2017, according to J.B. Hunt officials. Company officials said J.B. Hunt’s Final Mile Services will grow to include more than 104 locations and 3.2 million square feet of warehouse and facilities space.

J.B. Hunt’s purchase of a company that delivers bulky items, usually furniture, could indicate 2020 could be a big year for acquisitions, some transportation analysts and experts say. And final-mile companies appear to be desired by many carriers, said John Anderson, operating partner of Greenbriar Equity Group, a New York-based firm that has several transportation companies, including Lazer Ship, in its portfolio.

Anderson told Transport Topics he expects the pace of logistics-related acquisitions to pick up in 2020, especially as e-commerce grows.

“I would guess 2020 will see better activity in acquisitions of final-mile and parcel companies,” Anderson said. “People want to grab players and positions.”

Anderson said the U.S. environment also will be better in 2020 than 2019 for acquisitions, with less uncertainty about foreign trade and the Brexit issue in Europe. Companies “took a pause” acquiring new businesses in 2019, Anderson said, but now many U.S. companies feel more confident as they have cash saved or have attractive access to credit markets, making acquisitions easier.

More such industry acquisitions are expected. In late September, XPO Logistics CEO Brad Jacobs signaled to analysts he might be ready to acquire some new businesses. According to notes from an analysts meeting with Morgan Stanley, obtained by TT, Jacobs said he now is spending 10-15% of his time looking at possible transactions.

XPO

XPO workers make a porch delivery. (XPO Logistics)

XPO has more than $5 billion in cash, according to Nikhil Sathe, managing director of the mergers and acquisitions practice for Armstrong & Associates Inc., a Wisconsin-based analyst firm. Sathe said XPO likely will go big in 2020.

“[XPO] is not going to buy a $100 million brokerage,” he said. “They are going to buy something big.”

Sathe said Armstrong & Associates believes mergers and acquisitions will accelerate through 2020, especially regarding third-party logistics and light-asset companies. One of the reasons is an expected 20% growth in U.S. e-commerce and final-mile business in the new year. Sathe said Armstrong’s 20% e-commerce estimate is “very conservative.”

It won’t just be carriers or logistics companies buying businesses, though. Sathe said private equity firms and other types of financial institutions are eyeing light-asset transportation and logistics companies in 2020.

XPO ranks No. 1 on the Transport Topics Top 50 list of the largest logistics companies in North America and No. 3 on the Transport Topics 100 list of the largest for-hire carriers.

J.B. Hunt ranks No. 4 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. It also ranks No. 4 on the Transport Topics Top 50 list of the largest logistics companies in North America.

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