Key Takeaways
- USA Truck, an Arkansas-based truckload carrier, has been acquired by a group of its current and former leaders from Danish freight forwarder DSV.
- The acquisition was led by current CEO George Henry and former CFO Zachary King, with James Reed, former USA Truck CEO, acting in an advisory capacity.
- The change to private domestic ownership will provide the company with additional flexibility to pursue growth.
- USA Truck operates a fleet of 1,800 trucks and 6,000 trailers, and offers an expansive logistics service.
- The company has undergone significant transformation, including a turnaround from operating at a loss during the 2019 freight recession to returning to profitability by 2020.
Introduction to the Acquisition
The recent acquisition of USA Truck by a group of its current and former leaders marks a significant development in the company’s history. The group, which includes current CEO George Henry, former CFO Zachary King, and former CEO James Reed, acquired the company from Danish freight forwarder DSV. The financial terms of the transaction, which closed on Friday, were not disclosed. This move is expected to provide USA Truck with the flexibility to pursue growth and expansion, free from the constraints of being part of a larger, global organization.
Background on USA Truck and DSV
USA Truck was acquired by DSV as part of its purchase of DB Schenker in 2022. At the time, DSV announced that it would be shopping USA Truck, as the asset-based operation no longer fit with its mostly asset-light offering. This decision was likely driven by the fact that USA Truck’s business model, which relies on owning and operating its own fleet of trucks and trailers, is different from DSV’s focus on providing logistics and freight forwarding services without owning physical assets. The acquisition of USA Truck by its current and former leaders marks a return to private domestic ownership, which is expected to benefit the company in the long run.
Leadership and Operations
The acquisition of USA Truck will see George Henry continue to lead the day-to-day operations of the company, with Zachary King stepping back in as the acting CFO. James Reed, former USA Truck CEO, will act in an advisory capacity, bringing his expertise and experience to the table. Reed is currently the chairman of autonomous trucking company Kodiak AI and is an operating partner at private equity firm Banner Capital. The leadership team is well-positioned to drive growth and expansion at USA Truck, building on the company’s strong foundation and expertise in the truckload carrier market.
USA Truck’s Turnaround Story
USA Truck has undergone significant transformation in recent years, turning around from operating at a loss during the 2019 freight recession to returning to profitability by 2020. The company achieved this turnaround by culling its fleet by 10%, which helped improve asset utilization and reduce its reliance on the spot market. This strategic move allowed USA Truck to focus on its core business and improve its operational efficiency. The company’s adjusted operating ratio in its TL segment improved significantly, reaching 87% in the 2022 first quarter. Additionally, USA Truck reduced its debt leverage from more than 4 times adjusted EBITDA to 1.7 times, demonstrating its commitment to financial discipline and responsible management.
Future Prospects and Opportunities
The acquisition of USA Truck by its current and former leaders marks an exciting new chapter in the company’s history. With its strong foundation, expertise in the truckload carrier market, and expansive logistics offering, USA Truck is well-positioned for growth and expansion. The company’s leadership team is committed to building on its success and driving further improvement in its operations and services. As George Henry noted, "The extensive knowledge and global supply chain insights gained under two of the world’s leading freight forwarders are now a permanent part of our operational DNA." With its newfound flexibility and autonomy, USA Truck is poised to capitalize on new opportunities and continue to deliver value to its customers and stakeholders.
Conclusion and Final Thoughts
In conclusion, the acquisition of USA Truck by its current and former leaders is a significant development that marks a new era for the company. With its strong leadership team, expertise in the truckload carrier market, and expansive logistics offering, USA Truck is well-positioned for growth and expansion. The company’s turnaround story is a testament to its resilience and commitment to operational excellence, and its future prospects look bright. As the company continues to evolve and adapt to the changing landscape of the logistics industry, it is likely to remain a major player in the market, delivering value to its customers and stakeholders alike.