Daseke Continues to Seek Additions to Flatbed, Heavy-Haul Enterprise
This story appears in the March 14 print edition of Transport Topics.
NASHVILLE, Tenn. — Flatbed entrepreneur Don Daseke continues to build his company by hunting for merger candidates even though the current business environment does not favor an initial public offering for what is now the second-largest company in his sector of trucking.
In an interview March 1 during the Technology & Maintenance Council annual meeting here, Daseke said his strategy is to buy “outstanding companies that aren’t for sale.”
As an example, Daseke said he had to court the owners of Bulldog Hiway Express for three years before closing that merger in June. He rejects calling the deals “acquisitions.”
Daseke prefers “mergers” because he wants these companies to remain intact as they join a larger whole, rather than just the acquisition of selected assets.
His company, Daseke Inc., has only 15 employees at headquarters in Addison, Texas, whereas the nine operating companies that provide flatbed, heavy-haul and specialized transportation employ 3,000 people.
Daseke Inc. ranks second in that sector of the Transport Topics Top 100 list of for-hire carriers — behind Landstar System — and No. 49 overall.
He said the people in Addison are not “micromanagers.” Instead, he relies on the veteran managers who remain with the operating companies after the mergers are complete.
Nonetheless, he came to TMC and the concurrent Executive Leadership Forum of American Trucking Associations to learn more about trucking. TMC is a division of ATA.
Daseke said some of his maintenance vice presidents went to TMC, so he decided to come and talk to people.
“I think TMC is a bit of an industry secret. It’s a strong show,” he said.
The ownership of Daseke Inc. is 71% held by Daseke himself and other people in the Addison office, and the top management of the nine operating companies. Institutional investors own 12%. The remaining 17% is owned by “friends and family,” he said.
Daseke said he and his colleagues have a tricky balancing act in their management. They want to centralize functions where they can save money but not crimp the management styles of the company presidents who made the trucking companies profitable in the first place.
Good areas for centralization are fuel purchasing, liability insurance, lines of credit and employee health insurance. The rates for these from suppliers get better as the orders get bigger.
Areas for local control are accounts receivable and payable, and driver and customer relations. He wants those done at the carrier level.
Information technology and truck purchasing are gray areas in between, with a bit of centralization and some local autonomy, he said.
Flatbed and heavy-haul activity show a lot of variety now, depending upon the customer. Daseke said aerospace, building materials and wind turbines are doing well. Even with a strong U.S. dollar hurting many exports, Daseke said Boeing Co. is busy.
Carriers that supply the oil and gas industry and agriculture or farm equipment are in a relative dry spell, he said.
Daseke said he shares some tendencies with Warren Buffett and his Berkshire Hathaway conglomerate. Berkshire provides its portfolio companies with favorable rates on capital for operating and expansion, and mentoring on management. Daseke said he sees that as his job as well.
“The difference is that Berkshire Hathaway is in many different businesses [railroads, insurance and others], whereas we’re all flatbed and heavy-haul,” he said.
In addition to Bulldog Hiway, the Daseke companies are Boyd Bros. Transportation, WTI Transport, Lone Star Transportation, Central Oregon Truck Co., Smokey Point Distributing, E.W. Wylie Corp., J. Grady Randolph Inc., Mid Seven Transportation and Hornady Transportation.
Daseke entered trucking fairly late in his business career, just 7½ years ago, he said, at the suggestion of an investment banker friend.
“I love what we’re doing. I love the people I’m involved with, and every day excites me.”
