3PL recap: COVID performance makes M&A valuations difficult

“Truckload brokerage is probably one of the hardest markets right now to get your hands around because there are these fundamental questions going around, including autonomous vehicles. So I think we’re in a really difficult time period for valuing companies and that obviously leads to increased discrepancies between buyer and seller expectations. But, for sure, in 2021 we saw an incredibly robust market environment.”

“We’ve seen a cycle where financial buyers have been exiting in two-and-a-half to three years because the growth curve has been that dramatic. But in this environment, strategic buyers have a bit of an advantage over sponsors, where last year it was a bit of the inverse. The reason for that is that this intrinsic value concept can enable a strategic to pay a multiple that otherwise might look daunting whereas if a sponsor is mistiming their entry into the marketplace at a time when they’re buying peak EBITDA and then there’s a subsequant trough, they’re going to get hurt.”

“What we’ve seen over time is that specialization has turned into broadening. Why? It’s because of capitalizing on the customer. The hardest thing to obtain is the opportunity to sell to that customer with a viable solution set. Unquestionably we’ll see increased bundling. … What we’re seeing is to own that customer relationship you need to do more end-to-end and deeper.”