Five Auto Haulers to Merge as Backer Files for IPO
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Five auto carriers look set to merge, with the combined entity likely to then add to its assets by buying up competitors, if an initial public offering pans out as planned, according to a U.S. Securities and Exchange Commission filing.
Filing under the name of Proficient Auto Logistics, the plan is that the five companies — Proficient Auto Transport, Delta Automotive Services, Deluxe Auto Carriers, Sierra Mountain Group and Tribeca Automotive — would combine and become one of the larger auto haulers in North America.
The combined company would operate roughly 1,130 auto transport vehicles and trailers, including 615 company-owned transport vehicles and trailers, according to the April 11 SEC filing.
As of Nov. 30, the filing said, the 615 company-owned tractors and trailers had an average age of around 5.8 years and 5.6 years, respectively.
O'Dell
The combined companies had 649 employees at that point and 49 locations across the United States. Proficient Auto Transport is based in Jacksonville, Fla., Delta and Tribeca are based in New Jersey, while Deluxe and Sierra Mountain are based in California.
The five companies service 17 of the top 18 global original equipment manufacturers by sales volume in 2022 that sell in the U.S. The companies posted a compounded annual growth rate of about 15% from 2019 to 2023 and argue in the prospectus that there are a number of tailwinds set to boost the fragmented sector.
Tailwinds for auto carriers include recovering auto sales and production volumes, transportation equipment capacity shortages, a shift toward nonunion auto transportation and logistics companies, increasing auto replacement rates and growth in EV consumption, it said.
The prospectus argues the anticipated management team at the newly enlarged carrier would exploit those tailwinds as well as potential supply chain efficiencies and rivals it could buy up and slot into its portfolio.
Former Saia Inc. CEO Richard O’Dell would take the helm of the combined company as CEO. Alongside O’Dell would be auto transportation veteran Randy Beggs as chief operating officer.
Beggs
Beggs, who has served as CEO of Proficient Auto Transport since 2018, spent over 20 years at Jack Cooper Holdings.
Kansas City, Mo.-based Jack Cooper Holdings is the No. 2-ranked player in the auto transportation sector with 857 company-owned tractors, 429 lease-to-own tractors and 1,284 trailers.
Jack Cooper trails only Plymouth, Mich.-based United Road Services on the Transport Topics list of the largest auto haulers in North America. It runs 1,128 company-owned tractors, 850 lease-to-own tractors and 2,110 trailers. Jack Cooper also ranks No. 75 on the TT 100 list of the top for-hire carriers in North America.
“The auto transportation and logistics industry is highly fragmented, with the majority of the industry represented by smaller, regional providers representing attractive tuck-in acquisition opportunities for us. We see opportunity with regional providers that overlap existing geographic footprints of the founding companies that would improve our network density in select geographies and add new customers,” according to the prospectus.
“There are several new geographic regions where we can expand our footprint via the acquisition of smaller regional providers,” it added. “When pursuing an acquisition, we intend to acquire established, high-quality companies in markets where we can establish a leading market position to serve as core businesses into which additional operations may be consolidated.”
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