Heniff, Superior Bulk Logistics and Freymiller hit the auction block

Superior Bulk Logistics, a similarly sized carrier with 1,100 tractors and 2,000 trailers, recently underwent a leadership change. In July, chief executive officer Len Fletcher retired and was succeeded by Wes Stone. Fletcher had been with SBL since its acquisition of Central Transport in 1997 and served as the company’s chief executive officer since 2008. Stone has been with SBL for more than 20 years. S.J. Consulting estimated that Superior brought in revenues of $277 million in 2018. 

Chemical haulers are some of the most attractive carriers for private equity buyers because their specialization in certain commodities and close customer relationships often form an economic moat that can protect their profits from freight cycles. 

Dry van carriers might sell for two to five times earnings before interest, taxes, depreciation and amortization (EBITDA). But a chemical hauler with the scale of Heniff or Superior could fetch up to eight times EBITDA from a private equity firm, a private equity investor involved in similar deals told FreightWaves, depending on the company’s growth prospects. Strategic buyers – an industrial company or another transportation company – typically pay lower multiples and put less leverage on an acquisition target.

Recent private equity deals in the tanker space include OMERS Private Equity’s $1.9 billion leveraged buyout of Kenan Advantage Group in 2015. Kenan is the largest tanker/wet bulk fleet in the space, with about 4,900 of its own tractors and 1,500 owner-operated tractors.

Other chemical haulers have a longer history with private equity. Quality Distribution, the second-largest fleet, wth 717 company-owned tractors and more than 1,800 owner-operated tractors, is a case in point, having been taken private twice. In 1998, Apollo took Quality Distribution private in a leveraged buyout worth $250 million, then engineered an initial public offering of the company five years later at a valuation of $300 million. In 2015, Apax Partners and Altamir took Quality Distribution private again in an $854 million leveraged buyout. 

Freymiller, the third trucking company now exploring a sale, is a second-generation, family-owned carrier that recently celebrated the 50th anniversary of its founding. Freymiller runs more than 530 tractors and offers dedicated, intermodal and refrigerated services. David Freymiller, son of founder and chairman Don Freymiller, has been the chief executive officer for 25 years. The oldest son, Dennis, is Freymiller’s vice president of sales and marketing, and daughters Diane and Denise also work at the carrier. S.J. Consulting estimated that Freymiller posted 2018 revenues of $98 million. 

Representatives of Heniff, Superior Bulk Logistics and Freymiller did not respond to requests for comment.