Outlook Brighter for Trucking M&A Market in 2024

Transaction Value Tumbled 82%, Volume Fell 33% Year-Over-Year in 2023
Getty Image depicting business merger
“In terms of the valuation limit, I’m sure many people can appreciate over the last three or four years what a roller coaster it has been,” says Tenney Group CEO Spencer Tenney. (Ralf Hahn/Getty Images)

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The trucking acquisition market is looking to enter a more active year with market conditions likely to drive buyers and sellers to the table in 2024, according to the Tenney Group.

S&P Capital IQ found that the total transaction value created from transportation and logistics deals fell 82% year-over-year in 2023. The volume of deals in the sector also declined by 33%. This came amid declining freight activity and rapidly rising interest rates throughout the past year.

“So said another way, there was two-thirds of the deals, and the size of those deals was exponentially lower,” Tenney Group CEO Spencer Tenney said. “What were the major takeaways? We’ve already alluded to some of these. No. 1, short supply of sellers. I’ve never seen anything like this. But when you think about what happened, you’ve got the freight market causing major problems.”

Tenney added there were about a dozen interest rate hikes in the past two years, and there has been a normalization of record-high equipment values. He noted that these factors created a dramatic swing in terms of what values likely would be available for carriers. Because of that, a lot of sellers pumped the brakes on making deals, instead choosing to wait and see what happens.

Spencer Tenney


“In terms of the valuation limit, I’m sure many people can appreciate over the last three or four years what a roller coaster it has been,” Tenney said. “That was just a crazy time to try to figure out how to value an asset-heavy trucking company. Of course, that’s all normalized.”

Tenney noted that the market essentially still is dealing with the tailwinds of 2022 and the headwinds of 2023. He added that this has made it challenging for buyers and sellers to get to an understanding from an evaluation standpoint.

“We’ve had interest rates this high; that’s not the issue,” Tenney said. “We’ve never in history had interest rates escalate that quickly. So, a lot of potential sellers understandably sat on the sidelines, and it was probably the right call. Secondly, the structure plays a major role.”


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Tenney noted deal structuring becomes the only way to factor in risk when the freight market is challenging enough. But he is encouraged by what he has seen when it comes to buyers and sellers finding creative methods for understanding risk in the current market and structuring around it. He also pointed out that last year saw a shift in that market tailwinds in the prior two years were no longer making everyone look like market leaders.

“Putting some structure around those defined risks in a way that allowed sellers to participate in the upside of whatever they produce as part of that formula,” Tenney said. “But also providing some hedge and some protection for the buyer should conditions get worse. Those are the types of structures we anticipated coming into 2023 with all the signals coming our way.”

The Tenney Group Annual M&A Report found there has continued to be strong interest over the past four years in acquiring companies from both strategic and financial buyers, meaning people already in the transportation sector as well as professional investors. But it tends to be the strategic buyers that get to the finish line, with that group bringing 85% of all deals to the table.

“It’s very likely that someone that’s going to invest in your business is someone who already understands the space,” Tenney said. “So, you need to really put investment and time around how to package your business so that person can fully appreciate it. This is just very valuable to cut the noise, who’s going to buy the business. It’s likely going to be that profile.”

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Tenney is still hopeful that there are going to be lots of opportunities in the year ahead with sellers starting to adjust their expectations to better match the current market. But on the flip side, he also pointed out, the pain points in the market with costs increasing have created urgency for buyers to come to the table in a fair-minded and effective way.

“And they have more competition,” Tenney said. “We’ve never had more competition as far as new buyers entering the space, so we think there’ll be more buyers and more sellers. As a result of that, we’ll get to the point of valuation alignment much easier.

“So, we’re excited to see what happens on that first prediction. The second thing that we have here is buyers will demonstrate discipline. Now we’re specifically talking about your public strategics, your large privately backed strategics and all things venture capital.”