Forward Air to Acquire Linn Star for $57.2 Million
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Forward Air Corp. will acquire privately held Linn Star Holdings Inc., Linn Star Transfer Inc. and Linn Star Logistics, providers of final-mile services, for $57.2 million, according to a Dec. 12 Forward Air news release.
The transaction will not include Linn Star’s California operations. Greeneville, Tenn.-based Forward Air plans to fund the transaction from cash on hand and is targeting a January close date, according to the news release.
Linn Star specializes in final-mile logistics and in-home installation services for a range of national retailers and manufacturers. The company is headquartered in Cedar Rapids, Iowa, and has operations primarily in the Midwest and Southwest.
Schmitt
Forward Air CEO Tom Schmitt said in a statement that the Linn Star addition substantially expands Forward Air’s capabilities in the Midwest with a footprint that is complementary to its existing operations.
In May, Forward Air acquired another privately held final-mile provider, FSA Logistix, in a $27 million deal that expanded its reach in the East, Midwest, Southwest and West. FSA specialized in last-mile logistics for national retailers, manufacturers, e-retailers and third-party logistics companies. It had management offices in Fort Lauderdale, Fla., and Southlake, Texas.
Schmitt noted in the Linn Star release that while Forward Air started 2019 with final-mile capabilities in eight major U.S. markets, the FSA and Linn Star deals helped bring that total to 83 markets.
The Linn Star segment will be folded into Forward Air’s expedited less-than-truckload division.
Forward Air officials did not return messages seeking comment.
Benjamin Hartford, an analyst for investment firm Robert W. Baird and Co. Inc., who follows the company, told Transport Topics that the Linn Star purchase fits into Forward Air’s aggressive growth plan to acquire more customers for expedited LTL, and to build a large final-mile operation.
“Final-mile is one of those businesses that complements expedited LTL,” he said. Hartford added that Forward Air may have decided against adding Linn Star’s California operations in order to avoid that state’s regulatory environment.
Hartford noted that Linn Star does a lot of final-mile delivery of heavier freight items for commercial entities and manufacturers, and expects the merged company to expand its installation business by going “beyond the threshold” to assist in setting up equipment.
Forward Air offers expedited less-than-truckload, truckload premium services, and intermodal and pool distribution, providing high-frequency handling and distribution of time-sensitive products.
Forward Air has been pursuing wider LTL markets since 2015, when it bought Towne Air Freight of South Bend, Ind., for $125 million. At the time, the deal brought together two of the largest companies specializing in transporting cargo to and from airports in the United States.
Forward Air was founded in 1990. It provides ground transportation and related logistics services to the North American airfreight and expedited LTL market, according to its website. The company says it offers surface shipping on an accelerated time-definite basis, delivering cargo at a specific time, but under less time-sensitive situations, which it says is often a cost-effective alternative to air transportation.
Forward Air has 90 facilities located at or near major U.S. and Canadian airports, and 12 regional sort centers. Before the acquisition, Forward Air had more than 5,000 employees; 585 company-owned tractors; 600 lease-to-own tractors; and more than 6,600 trailers.
Forward Air ranks No. 31 on the Transport Topics Top 100 list of largest for-hire carriers in North America, and No. 1 on the Air/Expedited sector list.
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