Arnold Transportation Services, a division of U.S. Xpress Enterprises, has acquired Fort Worth, Texas-based LinkAmerica.
The deal is expected to be completed in January. The two companies, which will now employ more than 1,800 drivers and boast a fleet of 1,400 trucks, will conduct business under the Arnold banner.
According to a U.S. Xpress release, Arnold is now expected to generate more than $220 million in annual revenue. No financial details of the transaction were released.
U.S Xpress had been looking for a way to bolster capacity in the Southwest, where demand for Arnold’s services has been robust, U.S. Xpress Chairman and Chief Executive Officer Max Fuller told American Shipper
. The company needed more capacity in the area, and LinkAmerica’s core business comes from the Southwest.
“(The merger) should help us be able to operate the trucks a lot more efficiently than what we have in the past and be able to provide more capacity for our customers in those markets,” Fuller said. “We’re trying to build a super regional operation, operating primarily between the Southeast and the Southwest.”
The company, which has six divisions, has been experiencing significant growth. About half of U.S. Xpress’ expansion has come from acquisitions, Fuller said. This includes a recent movement into Mexico, where last month the company purchased a 90-percent share of Xpress Internacional and created a joint-venture with Logisti-K. During the firm’s 26 years in existence, Fuller said U.S. Xpress acquired 23 companies, but the deal with LinkAmerica is unique.
LinkAmerica's previous president, Todd Smith, joined Arnold in 2011 after running the company's operation for five years. Fuller also regards the deal as more of a combination of the two companies than a straight-forward acquisition. Both parties took four or five months to hammer out the agreement, a significantly slower timeline than some of U.S. Xpress’ past takeovers, some of which have been completed in 45 days, Fuller said.
“When you’re dealing with another potential partner, you want to make sure everything’s right, and that’s what we did in this case,” he said. “We needed to make sure everyone was comfortable putting the companies together and then needed to agree on how the combined company would look.”
Fuller said he’s been hearing positive news about the direction of the domestic trucking industry. Customers have told him volumes will start increasing soon, and that lead him to get this acquisition completed in order to prepare for the uptick. With capacity a significant issue in the trucking industry, he said, it was paramount to bring the two companies together.
“Given some of the things that will probably happen next year, capacity’s going to tighten even more,” he said, adding that 25 percent of the industry’s capacity has vanished in the past four years due to bankruptcy, downsizing and competition from rail. “And the guy who’s got the capacity, is going to get the freight.”
With the recent deals in Mexico and the new addition to Arnold, U.S. Xpress seems poised to take on increased volumes, but Fuller said the company will continue to evaluate the North American trucking market and expand as needed.
“We continue to position our company with those customers that we think have a good growth potential and we can grow along with them,” he said. - Jon Ross