Daseke Prepares to Offer Stock to Drivers, Seeks Additional Mergers After Going Public
This story appears in the March 13 print edition of Transport Topics.
One of the first projects for flatbed group Daseke Inc. since going public on Feb. 28 will be to create a stock ownership plan for more than 2,300 drivers in the corporation’s nine operating companies, Chairman and CEO Don Daseke said in an interview.
The Addison, Texas-based carrier went public by a merger with Hennessy Capital Acquisition Corp. II, a special-purpose acquisition company. While the main purpose of the $148 million stock transaction is to raise money for merging more open-deck and specialized carriers into the company, Daseke told Transport Topics on March 7 that within 60 days — by early May — management will roll out a detailed stock plan for drivers.
“The driver issue is the biggest issue faced by trucking companies today. There’s almost a fixed pool of drivers, and he who has the drivers wins,” Daseke said in explaining the company’s incentive plan.
Stock helps in an overall recruitment and retention plan for drivers but is not a silver bullet that fixes everything, Daseke said. For an irregular-route, longhaul collection of companies providing flatbed transportation, Daseke said, driving is a particularly challenging job.
Load securement is a critical, difficult task in the open-deck and specialized transportation world, and longhaul means home time is not always predictable.
Among other recruiting tactics, the company has invested in a young fleet (average tractor age is 2 years old) and comfortable terminals. Trucks also are outfitted with in-cab satellite television.
Collectively, the nine Daseke carriers have 3,000 trucks; 2,400 are company-owned and 600 come from owner-operators.
Daseke ranks No. 44 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers and is the second-largest flatbed carrier on the list behind No. 9 Landstar System.
Daseke is the largest trucking company to go public since Swift Transportation Co. in December 2010.
Daseke is always quick to say that his acquisitions should be called “mergers,” as the seller’s management always remains in place after the deal.
“We’re looking for management that wants to stay, not fixer-uppers or broken companies,” he said.
Daseke said he already has a shopping list of carriers to approach, “but I can’t tell you the names on the shopping list now.”
The sale of stock helped bring in more than $500 million in capital: $148 million in equity and $420 million in loan commitments, said Chief Financial Officer R. Scott Wheeler. After paying down some debt and fees, Wheeler said, net capital now available for wooing merger candidates and other purposes tops $200 million.
Consulting firm FTR said the open-deck segment of trucking generates more than $133 billion a year in revenue, and the Daseke companies represent less than 1% of that total.
At 77, Daseke is not interested in retirement. He said he has pledged not to sell any of his stock in the company (about 40%) for three years. He also signed a five-year employment contract.
The proportion available for trading on Nasdaq is about 30% of all company shares, he said.
As for the tactics of going public, Daseke Vice President Greg Hirsch said the company had considered the traditional route of an initial public offering, but last year, “the IPO market really crumbled; it shut down.” While looking for an alternative, company management started reading about special- purpose acquisition companies and wound up talking to people at Hennessey Capital about them, “and they had an industrial focus,” which matched with Daseke’s base of shippers, which produce and then want to move heavy manufactured goods.
