Werner Enterprises has acquired FirstFleet and 11 strategically located properties in an all-cash purchase for $282.8 million, the company announced Wednesday.
The deal, which closed on Tuesday, adds around 2,400 tractors to Warner’s dedicated trucking division, which will bring that segment’s total to nearly 7,400 trucks. The properties represented about $37.8 million of the purchase price.
Werner Chairman and CEO Derek Leathers said the acquisition of FirstFleet “comes at the ideal moment for our company.”
As the industry struggles with a prolonged tepid freight market, Werner said FirstFleet has sustained profitable growth for the past four decades. During that time, the company has forged long-term relationships with its top-10 customers, securing multi-year contracts with an average tenure of 17 years.
“By uniting FirstFleet's expertise in complementary new verticals with our resources and nearly 5,000 Dedicated trucks, we will improve our competitive position and accelerate profitable growth,” Leathers said in the announcement.
Leathers said the addition of FirstFleet strengthens Werner’s position, allowing it to capitalize on growth opportunities as market conditions improve.
FirstFleet brings more than $615 million in annual revenues and delivered consistent operating income margins, Werner said. FirstFleet is expected to immediately impact Werner’s earnings “with even greater earnings uplift expected within the first two years as approximately $18 million in annual synergies are realized,” Werner said.
According to Werner, the combination establishes the company as the fifth largest dedicated carrier in the U.S. by power units. The deal also increases its presence in more resilient categories such as grocery and baked goods, the carrier said.
Werner has focused on growing its truckload transportation services segment in recent years because of its higher-margin, long-term contractual dedicated business.
With the addition of FirstFleet, Werner expects to grow its dedicated revenues by approximately 50%. FirstFleet will operate as a business unit within Werner’s truckload transportation services segment.
Privately held FleetFirst was founded in 1986 and is based in Murfreesboro, Tennessee. Its corporate headquarters and a majority of the company’s management team will be retained as part of the deal, Werner said.
Paul Wilson, a co-owner of FirstFleet, said the combination is an “opportunity to leverage best-in-class technology and deliver significant value to stakeholders.”
“In choosing to combine with Werner, we are joining a leader in our industry with a proud history of caring deeply about their associates and customers,” Wilson said.
