Werner Acquires Truckload Carrier Baylor Trucking

Werner and Baylor trucks Werner Enterprises Inc./Baylor Trucking via YouTube

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Werner Enterprises Inc. said it is acquiring Baylor Trucking, a move that expands its truckload operations.

Through the deal, announced Oct. 3, Werner will add 200 trucks and 980 trailers owned by Milan, Ind.-based Baylor. Baylor operates two terminals that service the east-central and south-central regions of the country.

“Baylor, with its highly skilled professional drivers and nondriver associates, further strengthens our portfolio with their exceptional service and stellar reputation,” Werner CEO Derek Leathers said. “We expect this transaction to be accretive in year one, and anticipate buying power synergies through integrated management of our combined fleets.”



The Baylor leadership team and workers will remain in place, including 234 professional drivers. Werner said the deal increases its fleet size by 2.4%.

Leathers noted that both companies have similar customer-centric cultures.

 

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“Both Werner and Baylor believe deeply that our professional drivers are the backbone of our companies,” Leathers said. “Both companies were founded by their first driver. We look forward to welcoming the Baylor team and working together to create additional value for our customers and shareholders.”

Werner did not disclose the purchase price. It noted, however, that Baylor achieved $81.5 million of revenue for the 12 months ending Aug. 31. Its freight revenue mix is led by one-way dry van at 51%, followed by expedited dry van at 42% and refrigerated at 7%.

“I have admired and respected Werner for a long time as an industry leader,” Baylor President Cari Baylor said. “We are extremely excited to join the Werner team and look forward to continued growth as we leverage the strengths of Baylor and Werner to serve our existing and new customers at even higher levels.”

The Baylor brand will be retained to foster a smooth integration and driver retention. The company will operate as a stand-alone business unit within Werner. Its financial results will be reported in Werner’s one-way truckload unit within the truckload transportation services segme

“We will stand by our customers and continue to provide them with the superior service they expect from Baylor,” Baylor said. “Aligning with Werner only expands our service capabilities. Werner shares our passion for delivering value and continually creating personal and professional opportunities for our elite Baylor team.”

Stifel analyst Bert Subin noted that the deal brings a healthy infusion of equipment to Werner.

“This could have been, at least partially, an asset play for Werner,” Subin said. “The ability to get more trailers is definitely favorable, and then adding 200 trucks at a time when it’s been more difficult to get Class 8 trucks.” While he doesn’t know the age range of the trucks, Subin stressed adding equipment is favorable regardless; a relatively younger fleet would be desirable given the difficulty in acquiring new trucks, but older trucks are also desirable given tight market conditions.

He also noted that the deal builds on earlier acquisitions focused on dedicated freight. “This is the second acquisition now that Werner has done more on the one-way side of things,” Subin said. “They have, over time, signaled building much more of a dedicated business model. Plus, about half of this business [is] expedited.”

Beyond adding assets, Subin said the deal could help Werner drive margin expansion. “Hard to say what the purchase price was here, just because the only thing we know is the trailing 12-month sales,” Subin said. “So perhaps a good use of capital — better than sitting on cash if there are good discounts out there for trucking companies.” He added, “This, in theory, could be a super high margin business.”

Werner ranks No. 17 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 33 on the TT Top 50 list of the largest logistics companies.

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