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ArcBest to acquire MoLo for $235M, potential for future earnout

Deal complements ArcBest’s asset-light ambitions

ArcBest builds out brokerage in deal for MoLo (Photo: Jim Allen/FreightWaves)

ArcBest (NASDAQ: ARCB) announced Wednesday after the market close it is acquiring Chicago-based truckload broker MoLo for $235 million in cash upfront with a potential earnout based on adjusted EBITDA targets from 2023 through 2025.

MoLo is expected to generate revenue of approximately $600 million in 2021 and will double ArcBest’s platform to 70,000 carriers. The deal will make ArcBest a top-15 truck broker in the U.S.

The deal is expected to deliver earnings accretion, excluding acquisition-related amortization, in the first full year.

MoLo reported 2020 revenue of $274 million.

“We are pleased to add MoLo’s significant capabilities and talent to our truckload brokerage offering, allowing us to better meet the critical needs of our customers, deliver comprehensive supply chain solutions and accelerate our company’s continued growth,” said Judy McReynolds, ArcBest chairman, president and CEO.

The deal is expected to close in the fourth quarter subject to customary closing conditions.

“We have spent the last four years building a great organization, with a vision to create the best experience in the industry for our employees, drivers and shipper partners,” said Andrew Silver, CEO of MoLo. “We believe this partnership with ArcBest further advances the opportunity we have to achieve our vision.”

Founded in 2017, MoLo’s $600 million in expected revenue is generated from a shipper base of just 500. The potential for cross-sell and revenue synergies were highlighted as ArcBest currently serves 30,000 shippers.

“We can now offer our customers a breadth of services we couldn’t before, including owned assets, increased drop-trailer capabilities, LTL, expedited, outsourced transportation management and more,” Silver added.

“ArcBest’s timely investment further accelerates growth by increasing the scale of our asset-light business, and MoLo’s proven ability to cultivate significant shipment growth with large shippers will be highly complementary and synergistic,” McReynolds continued. “This acquisition capitalizes on our terrific business momentum and positions us to enhance value for all of our stakeholders, including our customers, employees, communities and ArcBest shareholders.”

Stephens Inc. acted as ArcBest’s financial adviser with J.P. Morgan (NYSE: JPM) representing MoLo.

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  1. Tcs53

    Never heard of MoLo. Sounds like a bottom feeder. ABF has stayed clear of truckload and been profitable, this sounds like some recent grad from business school with a better idea. Good luck

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.