Echo Global Logistics Files Stock Sale Plan With SEC
By Rip Watson, Senior Reporter
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Echo Global Logistics Inc. filed a registration statement with the Securities and Exchange Commission that said the third-party logistics operator intends to raise about $80 million by selling shares to the public.
The initial public offering, be-lieved to be the first in the logistics/brokerage business since Clark Holdings shares went public in 2006, would represent about 21% of the total shares outstanding if the shares are actually sold. The contemplated offering price is between $13 and $15 a share.
“We are a leading provider of technology enabled transportation and supply chain management services, delivered on a proprietary technology platform, serving the transportation and logistics needs of our clients,” the filing said, noting that it uses more than 4,500 carriers to serve more than 11,600 customers.
Echo’s filing also said that its proprietary software permitted the company to identify freight brokerage opportunities for truckload, less-than-truckload and intermodal service.
Echo was founded in 2005 by Eric Lefkofsky, Richard Heise and Bradley Keywell. One year later, Douglas Waggoner was hired as chief executive officer. Previously, Waggoner was CEO of USF Bestway, a regional trucking company whose assets subsequently were dissolved into other regional carriers owned by YRC Worldwide.
Former USF Corp. CEO Samuel Skinner, chief of staff for President George H.W. Bush, is the chairman of Echo.
The company has grown from revenue of $7.3 million in its first year to $202.8 million in 2008. Through the first half of this year, revenue rose another 22% to $109.4 million.
Net income last year reached $2.9 million before preferred stock dividends.
Company spokeswoman Kara Smith declined to provide details about the offering.
Outsourcing of logistics services, such as freight brokerage, has grown into a $127 billion business annually, said Armstrong & Associates, a consulting firm. An estimated 10% of total logistics spending is done through outsourcing, according to an Armstrong report.
“We believe that the market penetration of outsourced logistics in the United States will continue to expand over the next several years,” the company’s filing said, citing potential growth through more use of technology, strategic acquisitions, increasing business with current customers and adding new ones.
Echo’s filing said the company currently has more than 15 million shares outstanding.
A portion of the proceeds totaling $7.2 million has been slated for repayment of a term loan used from EGL Mezzanine LLC to pay for the June 2009 acquisition of RayTrans Distribution Services. Of that amount, $4.9 million will be repaid to a firm controlled by Lefkofsky.
