Heartland Express has acquired Washington-based Gordon Trucking in a deal worth around $300 million.
The deal will net Heartland a $30-million improvement in operating income by the end of 2017 by improving organizational best practices, optimizing locations and instituting other synergies, according to a press release.
Larry and Virginia Gordon, the second-generation owners of Gordon Trucking, have decided to retire, but Larry will sit on Heartland's board of directors. Their sons, Steve and Scott Gordon, are now part of Heartland's management team.
In Gordon Trucking, Heartland is acquiring a trucking firm oriented toward dry van markets with a 400-mile average length of haul that nonetheless gains 14 percent of its business from the refrigerated industry. Its assets include 6,500 trailers and 2,000 tractors; customers include Wal-Mart, Pepsi and General Mills. Heartland officials said this purchase will drastically improve its reach into the West Coast, as Gordon's major operations, locations that have no overlap with Heartland's holdings, are found in California, Idaho, Oregon and Washington.
"We searched for many years for the best fit to expand our capabilities for customers, our opportunities for drivers, and our growth for our stockholders. With GTI, Heartland acquires a major presence in the West, affording the combined customer base significant capacity nationwide through what is expected to be one of the five largest asset-based truckload fleets in North America. GTI has a well-earned reputation for superior customer service, with a modern fleet and a strong safety record. Culturally speaking, it is an excellent fit. I am pleased that Steve and Scott Gordon have joined Heartland's management team, and Larry Gordon has joined our board of directors," Heartland's chief executive officer, Michael Gerdin, said in a statement.
For the fiscal year ended Sept. 30, Gordon saw an operating income of $20 million and generated $433 million in revenues.