Privately Owned Schneider Eyes Going Public; IPO Would Be Trucking’s First Since 2010
This story appears in the Oct. 17 print edition of Transport Topics.
Schneider, the nation’s largest privately owned motor carrier and a major provider of intermodal transportation and logistics services, has decided to go public.
The company, announcing the move in a statement, intends to pursue an initial public offering of common stock in 2017, subject to satisfactory market conditions.
Reports about a possible stock sale by the Green Bay, Wisconsin- based company have circulated through the financial community for the past month or so.
Company officials declined to offer any additional comment beyond a statement issued Oct. 7. A registration statement relating to the sale of stock has not yet been filed with the Securities and Exchange Commission, and Schneider officials did not say when the company would take that step.
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“The objectives of the planned transaction are to facilitate continuity of controlling ownership of Schneider by the future generations of the Schneider family while continuing forward with its long-standing, independent and professional corporate governance structure,” the company stated.
The company is currently headed by Christopher Lofgren, who succeeded longtime president and CEO Don Schneider, who died in 2012.
Schneider ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in the United States and Canada, with annual revenue of $4 billion. The company also ranks No. 12 on the Transport Topics Top 50 list of the largest logistics companies in North America, with estimated net revenue of $1.3 billion from logistics services, including rail intermodal transportation, freight brokerage, warehousing and dedicated contract carriage services.
The company is among the most diversified of all trucking companies, with dry van truckload, expedited, liquid and dry bulk and petroleum tank operations. It also operates a domestic and international freight service in China.
In its statement, Schneider said proceeds from the sale of stock “will allow the company to continue its commitment to Wisconsin and the community and to maintain and further investments in its long-term positioning.”
In June, Schneider launched a new Final Mile business unit to provide residential and commercial delivery of furniture and other hard-to-handle goods. The new business unit initially would comprise the operations of two companies acquired by Schneider: Watkins & Shepard, a freight carrier based in Missoula, Montana, that specializes in handling furniture and other durable goods, and Lodeso, a software firm in Zeeland, Michigan, that provides technology for managing delivery services.
“There is an unmet need for delivery of items like furniture, exercise equipment or gun cases that do not go well into the parcel guys’ networks,” Mark Rourke, chief operating officer of Schneider, told Transport Topics in June.
The latest U.S.-based trucking company to complete a public stock offering was Swift Transportation in 2010. The carrier raised $810.3 million from the sale of 67.3 million shares. Earlier in the year, Roadrunner Transportation Systems also collected $148.4 million from the sale of 10.6 million shares. Swift and Roadrunner rank Nos. 6 and 16, respectively, on the for-hire TT100.
The biggest trucking IPO ever was United Parcel Service. The big parcel carrier, which ranks No. 1 on the for-hire TT100, raised $5.47 billion from the sale of 109.4 million shares in 1999.
A number of companies have tested the market for IPOs in recent years. Truckload carrier Transport Corp. of America signaled its interest in going public in 2013 but was acquired a year later by Canadian transportation conglomerate TransForce Inc., which ranks No. 10 on the for-hire TT100.
Sirva Inc., the Westmont, Illinois- based holding company for household goods movers Allied and North American van lines, announced plans to file a registration statement in 2015 but has not taken any further steps since then to complete a stock offering. Sirva ranks No. 20 on the for-hire TT100, with annual revenue of $1.5 billion.
The next-largest company that remains privately held is Estes Express Lines, which ranks No. 14 on the for-hire TT100 and is based in Richmond, Virginia. Estes provides less-than-truckload and truckload freight hauling, freight brokerage and forwarding services, equipment leasing and residential and commercial delivery. Estes reported revenue of $2.4 billion in 2015.
The size of companies matters when issuing stock, said Satish Jindel, CEO of SJ Consulting Group in Sewickley, Pennsylvania. “It’s very expensive to be a public company,” he told Transport Topics in an interview last week.
Jindel said he believes an IPO by Schneider is driven mainly by the need of Schneider family members for liquidity, but it may also serve to draw attention from potential suitors, such as FedEx Corp. Schneider would give the Memphis-based express package and less-than-truckload freight carrier a significant boost in truckload and intermodal freight and expand its dedicated and last-mile delivery services, he noted.
FedEx ranks No. 2 on the for-hire TT100.
The timing of a stock sale is also not ideal. “Truckload is not as robust,” Jindel observed. “Companies are not commanding the premiums they did two years ago.”
