Transportation & LogisticsStrategic Market Insights – Q3 2017 Report
www.g2cap.com 2
The Transportation & Logistics industry continues to evolve around e-commerce and fulfillment needs of
consumer demand. As the expected fulfillment timeframe of products shortens with Amazon’s
aggressive hourly deliveries, industry players are looking to decrease operational costs and increase
overall efficiencies to compete. Industry consolidation and strategic M&A activity has picked up,
particularly within the final mile and freight forwarding segments. Additionally, new technology within the
Trucking subsector, such as virtual reality and vehicle to vehicle software, has emerged to augment or
replace traditional means of training and fleet management. Larger industry players like UPS, have
taken the lead in technological improvement, implementing virtual reality and route optimization
software. The industry can expect such technological advancements to be commercially available over
the next few quarters.
Transportation & LogisticsG2 Insights – Sector Summary
The Transportation & Logistics industry continues to evolve to meet the growing demands of the
persisting e-commerce boom. Below are G2’s insights and observations:
FY 20171 LTM2
Sector
Number of
Selected
Companies
Median
Enterprise Value
(MM)
Median
Revenue
Growth
Median
EBITDA
Growth
EV /
Revenue
EV /
EBITDA
Logistics 19 4,060 7.9% 13.6% 1.0x 11.4x
Marine 17 3,104 -1.6% -12.8% 1.4x 9.3x
Rail Services 11 14,201 4.5% 6.3% 1.8x 9.3x
Trucking 18 1,173 4.3% 1.4% 1.0x 7.5x
Sector Summary in Millions USD (converted where necessary)
Data sourced from S&P Capital IQ on September 30, 2017
1 Compared with values at September 30, 20162 LTM Multiples as of September 30, 2017
The total T&L M&A transaction volume through the third quarter of 2017 has seen a dip in volume but
deal value remains consistent. High competition from both strategic and financial acquirers in
conjunction with a supportive financing environment has led valuations to remain strong, particularly in
the middle market. The current atmosphere has formed a “seller’s market” with vast amounts of capital
chasing a limited amount of desirable acquisition targets. The summary table below references select
public companies identified for each of the industry’s key segments: Logistics, Marine, Rail Services,
and Trucking. Public valuations range from ~8x EBITDA for Trucking companies to ~12x EBITDA for
Logistics providers. The Marine sector lags behind at ~8x EBITDA with YoY decreases in profitability
and revenues.
Sector Summary
www.g2cap.com 3
Transportation & Logistics
Companies continue to shift operational focus to take advantage of technology enablement and
become increasingly lean, efficient, flexible, and accurate.
Final Mile Delivery – Amazon’s acquisition of Whole Foods will push other retailers to accelerate the
development and rollout of their final mile delivery and omni-channel fulfillment services. Whole
Foods’ hundreds of locations enable Amazon to extend its same-day and hourly (within one or two
hours) fulfillment capabilities into the Grocery and Fresh Foods industry. Competitors, such as Stop
& Shop’s Peapod delivery, will feel increasingly pressured to speed up their delivery times to
compete. Signs of consolidation and acquisition strategies within the sector have begun as
Walmart, acquired last-mile delivery startup, Parcel Inc., on October 22 to better serve customer
demand for fresh groceries, accounting for 56% of annual revenues. On August 14, retailer giant
Target acquired the transportation technology company, Grand Junction to augment its next-day
delivery pilot program set to take place in New York’s Tribeca neighborhood next year.
Route Optimization – A growing number of companies are investing in the development of
sophisticated route optimization software and technology. Route optimization software instantly
aggregates and analyzes a wide range of both historical and real-time traffic, weather, route pick-
up, and drop-off data. By setting parameters to optimize both speed, efficiency, and even mileage,
the driver can both efficiently fulfill delivery demands and reduce operational costs. UPS recently
finished its pilot test of its ORION United States route optimization algorithms and is currently
working to implement and roll out its software to other international markets.
Virtual Reality for Driver Training – The Virtual Reality trend has transcended traditional video game
and entertainment purposes and entered the transportation and logistics space. In August, UPS
announced that it would start using virtual reality (VR) technology to train drivers to better identify
and spot road hazards throughout their delivery routes. According to UPS, this new VR training
module allows drivers to simulate the real experience of driving in urban settings, and as a result,
better protect its on-road employees and the general public. UPS has incorporated this VR training
to nine UPS Integrad training facilities in the U.S. and Europe since September.
Drone Delivery in E-Commerce – The personal and commercial drone market is expected to report
revenues of at least $6 billion in 2017 and is expected to hit $11 billion by 2020. Though majorly
publicized by Amazon’s pilot launch in December of 2016, over 20 drone delivery-related
companies have emerged over recent years. Retailers are eager to embrace the out-of-the-box
delivery medium as a recent study revealed 42% of manufacturers and retailers are in favor of
integrating logistics services with driverless vehicles.
G2 Insights – Emerging Industry Trends
Figure 1 – A UPS driver in the Integrad program using its new virtual reality training system for on-
the-road readiness.
Source: Transportation Topics, SupplyChainDive, SupplyChain24/7. CEI.org, Truckinginfo.com
www.g2cap.com 4
Transportation & Logistics
Truck Platooning – The emergence of truck platooning software, developed by companies like
Peloton Technology, allows multiple trucks to autonomously travel in convoys for enhanced fuel
efficiency. Through direct Vehicle to Vehicle (V2V) communications, platooning trucks accelerate
and brake together, reducing overall wind resistance. This in turn boosts the truck’s fuel efficiency,
reducing the primary costs for trucking fleets. As the convoy’s lead truck alternates in its position
throughout the haul, fuel efficiency can be distributed throughout the fleet. Once this technology is
fully commercialized to reach the market, the cost-advantage will draw significant demand from
truck operators. Peloton plans to release a limited number of commercial platooning software
licenses at the end of 2017, with a full product launch in 2018.
Hydrogen Fuel-Cell Trucks – This fall, Toyota announced its initial testing of its Project Portal Class
8 hydrogen fuel-cell trucks for drayage duty-cycle capabilities. Toyota unveiled its plan to build a
hydrogen fuel-cell truck that generated more than 670 horsepower with a 12kWh battery last April.
Hydrogen fuel-cell energy uses compressed hydrogen as a fuel source and releases water vapor as
an emission. Development of the technology spans over the last decade but has not taken off due to
severe shortages of fueling stations. However, experts predict commercial trucks will benefit more
from hydrogen in the future thanks to easy access to convenient industrial fueling stations at
warehouses or ports.
Laws Regulating Self-Driving on the Horizon – The American Vision for Safer Transportation
Through Advancement of Revolutionary Technologies Act and SELF DRIVE Act both advanced in
the Senate and House with bipartisan support. Both bills permit manufacturers to apply for
exemptions to federal vehicle safety standards in order to sell self-driving vehicles that may lack
conventional equipment, such as steering wheels and pedals. Both bills, however, maintain the
status quo for commercial trucks and buses, as labor unions, including the International
Brotherhood of Teamsters, lobbied hard to keep them out of self-driving bills. The main concern
over the application of driverless technology in commercial trucks is the potential threat to jobs in
the Transportation & Logistics Industry. It is estimated that up to three million commercial trucking
jobs could be at risk if self-driving vehicles replace human drivers.
G2 Insights – Emerging Industry Trends (continued)
Figure 2 – A Peloton Technology screenshot portraying the fuel efficiency gained from reducing
track by platooning throughout trucking fleets.
Source: Transportation Topics, SupplyChainDive, SupplyChain24/7. CEI.org, Truckinginfo.com
www.g2cap.com 5
Odyssey Logistics & Technology Corporation to acquire The Jordan Company (Pending) –
Announced on 8/30/2017, The Jordan Company has signed a definitive agreement to become a
new majority shareholder in Odyssey Logistics & Technology Corporation, a global logistics
solutions provider with intermodal, trucking, and managed services. Terms of the deal were not
disclosed. In addition to its pending investment of Odyssey, The Jordan Company, a private equity
firm with capital commitments exceeding $8B, owns American Fast Fright, an ocean freight
forwarder, and Quick, a mission-critical logistics firm.
J.B. Hunt Transportation (Nasdaq:JBH) to acquire Special Dispatch of San Antonio and Special
Logistics Dedicated (Pending) – J.B. Hunt, trucking and intermodal logistics provider, announced its
acquisition of Special Logistics Dedicated and Special Dispatch of San Antonio, providers of
dedicated sites, cross-docking and contract logistics, LTL, and dry van services. J.B. Hunt
referenced the acquisition as an opportunity to improve its final mile and e-commerce fulfillment and
delivery capabilities. The transaction value is expected to be $136MM.
United Road Services acquired by The Carlyle Group (September 2017) – United Road Services, a
provider of vehicle transportation and logistics in North America, was acquired by global asset
manager, The Carlyle Group from private equity group Charlesbank Capital Partners. The Carlyle
Group cited United Road’s strong growth over recent years as an important motive behind the
acquisition. Terms of the deal were not disclosed.
Celadon Group’s (NYSE:CGI) Flatbed Trucking Division acquired by PS Logistics (September
2017) – Celadon Group Inc. (NYSE:CGI) divested its Flatbed Trucking Division to PS Logistics, a
flatbed/heavy specialized logistics service provider. Celadon’s Flatbed Trucking Division generated
about $20MM in revenues in 2016 while PS Logistics logged approximately $495MM in revenues in
its flatbed/heavy operations. Though the terms of the transaction were not disclosed, it marks an
important point of industry consolidation within the flatbed subsector and a shift in strategy for
Celadon Group.
Milgram & Company acquired by C.H. Robinson Worldwide (August 2017) – C.H. Robinson, a
leading global third party logistics provider acquired Milgram & Company, a provider of freight
forwarding, customs brokerage, and surface transportation in Canada, on Aug. 31 for $62MM CAD
(~$50MM USD). Milgram posted approximately $124MM USD in revenues in 05/31/2017. The
acquisition allows C.H. Robinson to expand its North American presence by securing a Canadian-
based forwarder as well as provide expertise and additional resources for Milgram’s future growth.
United Global Logistics acquired by RoadOne IntermodaLogistics (August 2017) – RoadOne
IntermodaLogistics, an intermodal, distribution, and logistics service company acquired United
Global Logistics, a Chicago-based intermodal transportation company. With this acquisition
RoadOne is able to expand its capacity, improve its customer service, integrate and augment
existing technology, and acquire new service offerings.
Transportation & LogisticsSelected Industry Deals Q3 2017
Several notable transactions have already been completed or announced in the Transportation &
Logistics industry through Q3 2017. G2 has outlined select transactions below, followed by a more
comprehensive list on the following tables.
Source: Transportation Topics, S&P Capital IQ
www.g2cap.com 6
Transportation & Logistics
Marine
Recent Select Deal Activity – Pending & Closed
Date Closed Target Acquirer / Investor
Sep-17 Euromar LLC Euroseas Ltd.
Aug-17 Gardline Shipping Limited Royal Boskalis Westminster N.V.
Aug-17 Marenave Schiffahrts AG Ernst Russ AG
Aug-17 Astarte International Inc. Top Ships Inc.
Trucking
Date Closed Target Acquirer / Investor
Sep-17Celadon Group, Inc., Substantially All Assets of
Flatbed Trucking DivisionPS Logistics LLC
Sep-17 Penske Truck Leasing Co., L.P.Penske Automotive Group, Inc.; MBK USA Commercial
Vehicles Inc.
Sep-17 Garrett Bros., Inc. Tenaris S.A.
Sep-17R & R Trucking, Inc. and TNI USA Inc. and NEI
Transport LLCDaseke, Inc.
Sep-17 RDK Transportation Co. Inc. Mullen Group Ltd.
Aug-17 Milgram & Company Ltd. C.H. Robinson Worldwide, Inc.
Aug-17 Stella Environmental Services, LLC Hidden Harbor Capital Partners, LLC
Jul-17 R.E.M Transport Ltd. Jardine Transport Ltd.
Jul-17 Interstate Distributor Co., Inc. Heartland Express, Inc.
Jul-17 Steelman Transportation, Inc. and Group One Inc. Daseke, Inc.
Sector Summary in Millions USD (converted where necessary)
Data sourced from S&P Capital IQ on September 30, 2017
Date Closed Target Acquirer / Investor
Pending Odyssey Logistics & Technology Corporation The Jordan Company, L.P.
PendingSpecial Dispatch of San Antonio, Inc. and Special
Logistics Dedicated, LLCJ.B. Hunt Transport Services, Inc.
Sep-17 Sandifer-Valley Transportation and Logistics, Ltd. Radiant Logistics, Inc.
Sep-17 United Road Services, Inc.The Carlyle Group L.P.; Carlyle US Equity Opportunity Fund
II, L.P
Sep-17 Unitrans, Inc. Quick International Courier, Inc.
Aug-17 MacroPoint LLC The Descartes Systems Group Inc.
Aug-17 United Global Logistics Inc. RoadOne, Inc.
Aug-17 Professional Freight Solutions, Inc. Aerostar Global Logistics, Inc.
Jul-17 IDEAL Logistic Inc. Transport Guilbault Inc
Jul-17 Grand Worldwide Logistics Corporation American Fast Freight, Inc.
Logistics
Rail ServicesDate Closed Target Acquirer / Investor
Pending Nuovo Trasporto Viaggiatori SpA Undisclosed
Aug-17 Locomore GmbH & Co. KG LEO Express a.s.
Aug-17 Trans Eurasia Logistics GmbH DB Cargo AG
www.g2cap.com 7
Transportation & LogisticsPublic Trading Metrics – Logistics
Sector Summary in Millions USD (converted where necessary)
Charts show average daily multiples for each year
Data sourced from S&P Capital IQ on September 30, 2017
1.0x
0.8x0.6x
0.8x 0.8x 0.8x0.9x
1.0x 1.0x0.9x
1.0x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
EV
/ T
OT
AL
RE
VE
NU
E S&P 50010.6x
8.5x
7.0x
9.8x9.1x
8.7x
10.8x11.0x11.4x
10.2x
11.4x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
EV
/ E
BIT
DA
S&P 500
IndustryEnterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDA
EBITDA
MarginLT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Mean18,095 15,759 698 14,583 1,527 8.2% 3,120 2.2x 1.0x 11.4x
Median4,060 4,086 260 4,249 379 8.1% 811 1.8x 1.0x 10.0x
Company Ticker
Size (Millions USD)EBITDA
Margin
Leverage Valuation
Enterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDALT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Agility Public
Warehousing Company
K.S.C.P.
KWSE:AGLTY 4,551 4,086 263 4,249 366 8.6% 285 0.8x 1.1x 12.4x
Air Transport Services
Group, Inc.NasdaqGS:ATSG 1,905 1,439 63 906 223 24.6% 508 2.3x 2.1x 8.5x
Atlas Air Worldwide
Holdings, Inc.NasdaqGS:AAWW 3,529 1,662 272 1,971 396 20.1% 1,950 4.9x 1.8x 8.9x
Deutsche Post AG XTRA:DPW 58,800 53,825 1,886 67,863 5,137 7.6% 5,195 1.0x 0.9x 11.4x
DSV A/S CPSE:DSV 15,100 14,061 279 11,043 768 7.0% 1,114 1.4x 1.4x 19.7x
Echo Global Logistics,
Inc.NasdaqGS:ECHO 725 538 20 1,753 32 1.8% 207 6.5x 0.4x NM
Expeditors International
of Washington, Inc.NasdaqGS:EXPD 9,707 10,819 1,115 6,422 702 10.9% NA NA 1.5x 13.8x
FedEx Corporation NYSE:FDX 72,142 60,489 3,503 60,953 8,252 13.5% 15,137 1.8x 1.2x 8.7x
Forward Air Corporation NasdaqGS:FWRD 1,745 1,734 10 1,029 144 14.0% 21 0.1x 1.7x 12.1x
Hub Group, Inc. NasdaqGS:HUBG 1,480 1,466 152 3,729 147 3.9% 106 0.7x 0.4x 10.1x
Kuehne + Nagel
International AGSWX:KNIN 21,784 22,121 529 17,946 1,120 6.2% NA NA 1.2x 19.5x
Landstar System, Inc. NasdaqGS:LSTR 4,060 4,180 222 3,334 272 8.1% NA NA 1.2x 14.9x
Panalpina World
Transport (Holding) Ltd.SWX:PWTN 3,230 3,477 260 5,461 119 2.2% 1 0.0x 0.6x NM
Radiant Logistics, Inc. AMEX:RLGT 295 261 6 778 29 3.7% 37 1.3x 0.4x 10.4x
Ryder System, Inc. NYSE:R 9,809 4,480 55 6,995 1,816 26.0% 4,796 2.6x 1.4x 5.4x
TFI International Inc. TSX:TFII 3,660 2,312 0 3,476 379 10.9% 1,246 3.3x 1.1x 9.7x
United Parcel Service,
Inc.NYSE:UPS 117,419 103,901 3,544 62,924 7,847 12.5% 14,281 1.8x 1.9x 15.0x
Universal Logistics
Holdings, Inc.NasdaqGS:ULH 816 582 2 1,125 72 6.4% 214 3.0x 0.7x 11.3x
XPO Logistics, Inc. NYSE:XPO 13,040 7,986 291 14,690 1,196 8.1% 4,816 4.0x 0.9x 10.9x
www.g2cap.com 8
Transportation & LogisticsPublic Trading Metrics – Marine
Sector Summary in Millions USD (converted where necessary)
Charts show average daily multiples for each year
Data sourced from S&P Capital IQ on September 30, 2017
IndustryEnterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDA
EBITDA
MarginLT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Mean6,608 3,871 652 4,892 721 21.5% 2,738 5.8x 1.4x 9.3x
Median3,104 1,215 214 937 250 19.0% 808 4.9x 1.2x 9.0x
Company Ticker
Size (Millions USD)EBITDA
Margin
Leverage Valuation
Enterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDALT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Aegean Marine
Petroleum
Network Inc.
NYSE:ANW 979 201 82 5,301 107 2.0% 507 4.8x 0.2x 9.2x
A.P. Møller -
Mærsk A/S
CPSE:MAERSK
B51,999 38,729 3,644 36,631 7,155 19.5% 13,443 1.9x 1.4x 7.3x
COSCO Shipping
Specialized
Carriers Co., Ltd.
SHSE:600428 3,104 2,162 NM 937 154 16.4% 862 5.6x 3.3x NM
Costamare Inc. NYSE:CMRE 1,797 661 195 439 280 63.8% 754 2.7x 4.1x 6.4x
Diana Shipping
Inc.NYSE:DSX 977 385 42 124 NM -0.3% 634 NM NM NM
Evergreen Marine
Corporation
(Taiwan) Ltd
TSEC:2603 4,369 2,025 1,218 4,528 241 5.3% 2,501 10.4x 1.0x NM
Hapag-Lloyd
AktiengesellschaftDB:HLAG 14,697 6,917 860 9,660 820 8.5% 7,295 8.9x 1.5x NM
Kirby Corporation NYSE:KEX 4,155 3,562 NM 1,835 405 22.1% 592 1.5x 2.3x 10.2x
Matson, Inc. NYSE:MATX 1,954 1,215 15 2,007 226 11.2% 723 3.2x 1.0x 8.7x
Nippon Yusen
Kabushiki KaishaTSE:9101 11,247 3,503 1,356 17,580 762 4.3% 7,562 9.9x 0.6x NM
Nordic American
Tankers LimitedNYSE:NAT 954 545 34 313 90 28.6% 444 4.9x 3.0x 10.6x
Overseas
Shipholding
Group, Inc.
NYSE:OSG 501 197 205 433 125 28.9% 422 3.4x 1.2x 4.0x
Rand Logistics,
Inc.
NasdaqCM:RL
OG247 6 NM 114 22 19.0% NA NA 2.2x 11.4x
SEACOR Holdings
Inc.NYSE:CKH 1,395 818 223 860 111 12.9% 616 5.6x 1.6x NM
Seaspan
CorporationNYSE:SSW 3,706 876 306 844 501 59.4% 2,309 4.6x 4.4x 7.4x
Teekay LNG
Partners L.P.NYSE:TGP 4,088 1,417 191 404 279 69.2% 1,720 6.2x NM NM
Wallenius
Wilhelmsen
Logistics ASA
OB:WWL 6,173 2,593 755 1,156 258 22.3% 3,424 13.3x NM NM
9.0x
7.1x7.1x
7.8x8.2x
9.8x9.7x
10.5x
9.0x8.5x
9.3x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
EV
/ E
BIT
DA
S&P 5001.7x
1.4x
1.3x
1.7x1.5x
1.3x1.2x1.3x
1.3x1.3x
1.4x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
EV
/ T
OT
AL
RE
VE
NU
E
S&P 500
www.g2cap.com 9
Sector Summary in Millions USD (converted where necessary)
Charts show average daily multiples for each year
Data sourced from S&P Capital IQ on September 30, 2017
IndustryEnterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDA
EBITDA
MarginLT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Mean31,687 26,395 406 6,298 2,763 30.6% 5,576 2.1x 1.8x 9.3x
Median14,201 11,457 166 3,998 1,179 41.9% 4,161 2.1x 1.5x 10.5x
Company Ticker
Size (Millions USD)EBITDA
Margin
Leverage Valuation
Enterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDALT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
American Railcar
Industries, Inc.NasdaqGS:ARII 1,190 737 103 536 152 28.4% 533 3.5x 2.2x 7.8x
Canadian National
Railway CompanyTSX:CNR 70,458 62,116 101 9,823 5,287 53.8% 6,726 1.3x NM 13.3x
Canadian Pacific Railway
LimitedTSX:CP 31,090 24,495 114 5,183 2,679 51.7% 5,908 2.2x NM 11.6x
CSX Corporation NasdaqGS:CSX 60,298 49,556 591 11,582 5,177 44.7% 11,788 2.3x NM 11.6x
FreightCar America, Inc. NasdaqGS:RAIL 111 243 101 507 11 2.1% NA NA 0.2x 10.4x
Genesee & Wyoming Inc. NYSE:GWR 7,289 4,614 84 2,077 615 29.6% 2,414 3.9x 3.5x 11.8x
Kansas City Southern NYSE:KSU 14,201 11,457 166 2,469 1,179 47.8% 2,244 1.9x NM 12.0x
Norfolk Southern
CorporationNYSE:NSC 47,620 38,109 642 10,226 4,286 41.9% 9,553 2.2x NM 11.1x
The Greenbrier
Companies, Inc.NYSE:GBX 1,593 1,372 465 2,153 345 16.0% 533 1.5x 0.7x 4.6x
Trinity Industries, Inc. NYSE:TRN 7,496 4,828 809 3,998 859 21.5% 829 1.0x 1.9x 8.7x
Union Pacific
CorporationNYSE:UNP 107,205 92,821 1,286 20,724 9,800 47.3% 15,229 1.6x NM 10.9x
Transportation & LogisticsPublic Trading Metrics – Rail Services
8.4x7.9x
6.6x
9.5x10.1x
9.1x9.6x
10.4x
9.7x
7.6x
9.3x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
EV
/ E
BIT
DA
S&P 500
2.0x2.2x
1.9x
2.5x
2.2x
1.7x1.8x
2.3x2.3x
2.1x
1.8x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
EV
/ T
OT
AL
RE
VE
NU
E
S&P 500
www.g2cap.com 10
Transportation & LogisticsPublic Trading Metrics – Trucking
Sector Summary in Millions USD (converted where necessary)
Charts show average daily multiples for each year
Data sourced from S&P Capital IQ on September 30, 2017
IndustryEnterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDA
EBITDA
MarginLT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Mean3,187 2,696 70 2,222 322 9.9% 612 1.9x 1.0x 7.5x
Median1,173 990 38 1,209 156 12.5% 161 1.6x 0.9x 7.0x
Company Ticker
Size (Millions USD)EBITDA
Margin
Leverage Valuation
Enterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDALT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
ArcBest Corporation NasdaqGS:ARCB 961 860 103 2,774 147 5.3% 195 1.3x 0.3x 6.5x
Celadon Group, Inc. NYSE:CGI 561 187 6 1,055 83 7.9% 115 1.4x 0.5x 6.7x
Covenant Transportation
Group, Inc.NasdaqGS:CVTI 719 530 NM 679 98 14.4% 161 1.6x 1.1x 7.4x
Daseke, Inc. NasdaqCM:DSKE 949 579 42 682 74 10.9% 322 4.3x 1.4x 12.7x
Heartland Express, Inc. NasdaqGS:HTLD 1,918 2,089 171 549 165 30.1% NA NA 3.5x 11.6x
J.B. Hunt Transport
Services, Inc.NasdaqGS:JBHT 13,092 12,156 8 6,920 1,043 15.1% 1,085 1.0x 1.9x 12.5x
Knight Transportation,
Inc.NYSE:KNX 7,292 7,379 89 1,114 243 21.8% NA NA 6.5x NM
Landstar System, Inc. NasdaqGS:LSTR 4,060 4,180 222 3,334 272 8.1% NA NA 1.2x 14.9x
Marten Transport, Ltd. NasdaqGS:MRTN 1,110 1,120 10 688 133 19.4% NA NA 1.6x 8.3x
Old Dominion Freight
Line, Inc.NasdaqGS:ODFL 9,133 9,072 34 3,122 719 23.0% 45 0.1x 2.9x 12.7x
P.A.M. Transportation
Services, Inc.NasdaqGM:PTSI 285 152 NM 436 52 12.0% 102 1.9x 0.7x 5.4x
Roadrunner
Transportation Systems,
Inc.
NYSE:RRTS 765 365 5 1,972 101 5.1% NA NA 0.4x 7.6x
Ryder System, Inc. NYSE:R 9,809 4,480 55 6,995 1,816 26.0% 4,796 2.6x 1.4x 5.4x
Saia, Inc. NasdaqGS:SAIA 1,727 1,579 NM 1,292 168 13.0% 55 0.3x 1.3x 10.3x
Universal Logistics
Holdings, Inc.NasdaqGS:ULH 816 582 2 1,125 72 6.4% 214 3.0x 0.7x 11.3x
USA Truck, Inc. NasdaqGS:USAK 239 112 NM 418 19 4.5% 80 4.3x 0.6x 12.8x
Werner Enterprises, Inc. NasdaqGS:WERN 2,694 2,642 23 2,048 334 16.3% 75 0.2x 1.3x 8.1x
YRC Worldwide Inc. NasdaqGS:YRCW 1,181 373 182 4,748 253 5.3% 717 2.8x 0.2x 4.7x
6.1x6.2x
6.3x
7.9x 7.9x
7.4x 7.6x
8.9x
7.6x6.2x
7.5x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
EV
/ E
BIT
DA
S&P 500
0.8x0.7x
0.7x
0.9x0.8x 0.8x
0.9x1.1x 1.1x
0.9x1.0x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
EV
/ T
OT
AL
RE
VE
NU
E
S&P 500
www.g2cap.com 11
Transportation & LogisticsMarket Indicators
Market Index Trends
Last 5 Year EV / EBITDA Trend by Industry
Data sourced from S&P Capital IQ on September 30, 2017
The Transportation sector has recovered considerably over the last 12 months, tracking closely to the
S&P 500 index since Q4 of 2016.
Data sourced from S&P Capital IQ on September 30, 2017
Though still tracking below the S&P 500 EV/EBITDA multiple average, the industry has begun to slowly increase
its averages since Q4 2016, led by the Logistics segment followed by Rail and Trucking segments. The Marine
subsector has seen a slight decline over the last quarter.
-20%
0%
20%
40%
60%
80%
100%
120%
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Q1'14
Q2'14
Q3'14
Q4'14
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Q2'16
Q3'16
Q4'16
Q1'17
Q2'17
Q3'17
S&P 500 Transportation (Industry) S&P 500
0.0x
5.0x
10.0x
15.0x
Q1 '12 Q3 '12 Q1 '13 Q3 '13 Q1 '14 Q3 '14 Q1 '15 Q3 '15 Q1 '16 Q3 '16 Q1 '17 Q3 '17
EV
/ E
BIT
DA
S&P 500 Logistics Marine Rail Services Trucking
www.g2cap.com 12
Transportation & LogisticsM&A Activity – Middle Market
M&A transaction multiples are the median North American M&A activity independent of target / acquirer industry and enterprise
value. The dataset has been restricted to multiples between 0.0x and 30.0x EBITDA;
*Sourced through Pitchbook’s Q3 2017 Report.
US PE Buyout Activity by Quarter
US M&A Transaction Multiples
*Sourced through PitchBook Q3 2017 Report
Though mid market deal volumes have come down off historical highs, frothy debt availability
continues to drive premium valuations.3
40
32
2 40
0
40
5 51
6
40
7
47
6
52
9
50
2
50
1
49
5
48
8
52
0
51
4
48
2
49
4
48
7
40
8
38
1
22
4
19
5
23
4 30
2
28
9
28
2 30
1 31
3
31
3
30
8
29
5
34
0
25
7
30
0
29
4
27
8
27
1
24
2
19
8
52%
54%
56%
58%
60%
62%
64%
66%
68%
0
100
200
300
400
500
600
700
800
900
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2013 2014 2015 2016 2017*
Ad
d-O
n %
of B
uyo
ut
Deal V
alu
e (
$M
M)
Axis Title
Add-on Non Add-on Add-On % of Buyout
4.6x5.2x
4.7x
5.5x5.2x
5.7x5.4x
5.8x
3.5x4.x 3.8x 3.8x 4.x
4.5x
5.3x
4.7x
8.1x
9.1x
8.5x
9.3x 9.2x
10.1x10.7x 10.5x
$0
$2
$4
$6
$8
$10
$12
2010 2011 2012 2013 2014 2015 2016 2017*
Deal V
alu
e (
$B
)
Debt / EBITDA Equity / EBITDA Valuation / EBITDA
www.g2cap.com 13
G2 Capital Advisors provides C-level led investment banking and restructuring advisory services to
middle market institutional investors and companies. G2 offers a comprehensive suite of investment
banking services, creating a one-stop shop with non-conflicting strategic alternatives perspectives on
what is truly best fit for each client.
G2 OverviewInvestment Banking and Restructuring Advisory
THIRTY-FIVE professionals
across SIX offices
FOUR Industry Practice Groups
Transportation & Logistics / Supply Chain
Industrials / Manufacturing
Technology / Business Services
Aerospace & Defense / Security
FIVE Service Offerings
Securities
Sell-Side
Buy-Side
Operational
Restructuring
Financial
Restructuring
G2 Capital Advisors offers an integrated and complementary set of financial and corporate advisory
services to assist our clients through the lifecycle of a business.
G2 is focused in four sectors; each practice group headed by a leader with 20+ years of C-level
operating experience. G2’s managing directors have navigated all stages of the corporate lifecycle, from
growth to maturity, and apply that experience to provide advisory services to our clients.
Sector-Focused; Experience-Based
Transportation &
Logistics / Supply Chain
Industrials /
Manufacturing
Technology /
Business Services
Aerospace & Defense /
Security
Led by Ron Lentz Led by Jack Shields Led by Matt Konkle Led by Jim Bullion
Freight Forwarding
Trucking / Final Mile
Warehousing / Distribution
Third Party Logistics (3PL)
e-Commerce Fulfillment
Manufacturing / Distribution
Flooring
Plastics / Packaging
Consumer Products
Metals
Tech-enabled Services
BPO
Managed Services
Internet & Digital Media
Business Services
Cyber Security
Defense Robotics
UAV, C4ISR, Hardware
Aerospace Electronics
Telecommunications
G2 Overview
www.g2cap.com 14
Company Title Role
CEO
Restructured operations of international freight
forwarder and acquired 11 companies in 18
months before selling the parent at 4.5x premium.
EVPDoubled the size of company sales and EBITDA
in 18 months before selling at a 2.5x premium.
COORestructured and recapitalized the company,
before selling for $400 million.
COO
Restructured platform company for a private
equity group before selling for $658 million –
representing a 6x return on initial investment.
CEO
Co-founded the business in 2000, building the
company from start-up to $150 million in
revenues in 18 months then sold to private equity
firm in 2002.
EVPBuilt Ryder’s 3PL division from $100 million
revenues in 1988 to $2.4 billion in 1999.
Ron LentzPractice Leader
Transportation & Logistics
Ron Lentz, Managing Director
G2 Capital Advisor’s Transportation & Logistics industry practice leader, Ron Lentz, brings 25+ years of C-
level leadership and operating experience to the Transportation & Logistics practice group.
G2 OverviewSelect On-going G2 Projects
G2 Overview
Project Armor – G2 is currently advising a high growth, asset-
light, tech-enabled healthcare logistics provider in a sell-side
process. The client provides expedited logistics of
pharmaceuticals in a B2B capacity in North America.
Project Armor
Sell-Side
Healthcare Logistics
Project Customs – G2 is currently advising a leading customs
brokerage, compliance, and freight solutions provider in a buy-
side process. Search criteria includes:
Core Services: sophisticated Air freight forwarding,
international freight forwarding
Value-Added Services: Asset-light ancillary services,
import services, freight / customs bundling
Location: Headquartered in North America
Project Customs
Buy-Side
Freight Forwarding and
Customs Brokerage
www.g2cap.com 15
ReferenceG2 Team
For more information about G2, please visit: www.g2cap.com
Our corporate headquarters is located at: 535 Boylston Street, 11th Floor, Boston, MA 02116
Boston | Chicago | Indianapolis | Los Angeles | Naples | San Francisco
The information included in this Presentation is not a complete analysis of all material facts regarding any company,
industry, or security and does not constitute investment advice. Opinions expressed or implied by the materials here
presented reflect only the judgement of its author as of the date of the Presentation and is subject to change without
notice. The information in this Presentation has been obtained from sources which G2 generally considers reliable, but
we make no representation or warranty, express or implied, as to the accuracy or completeness of any information
herein. This Presentation has been prepared for informational purposes only and upon the express understanding that it
will be used only for the purposes set forth in the Section captioned G2 Overview above. G2 expressly disclaims any
and all liability which may be based on such information, errors therein or omissions there from. Securities offered
through Western International Securities, Inc. Member FINRA & SiPC. G2 Securities and Western International
Securities are separate and unaffiliated entities.
Ron Lentz, Managing Director Jeffrey Unger, CEO
[email protected] [email protected]
630.362.8317 617.918.7929
Theodore Bang, Analyst
617.910.0918
Term Definition
Revenue
Total revenue from the sale of goods and services rendered during the reporting period, in normal course of
business, reduced by sales returns and allowances, and sales discounts. For banks, this item is defined as net
interest income after loan loss provisions
EBITDAEarnings before interest, taxes, depreciation, and amortization. Calculated as Revenue – Expenses, excluding
interest, taxes, depreciation and amortization
Market CapMarket value of a company using most recently reported basic weighted average shares outstanding.
Calculated as Market Price (as of period end) * Basic Weighted Average Shares Outstanding
Long-Term DebtSum of the carrying values as of the balance sheet date of long-term debt with a maturity beyond one year or
the normal operating cycle, if longer
Net DebtNet Debt shows the company’s overall debt situation by netting the value of debts with cash and other similar
liquid assets. Calculated as Total Debt – Cash & Cash Equivalents and Short Term Investments
Enterprise Value
Enterprise Value represents the combined economic value of a company as of the most recent fiscal year end.
Calculated as Diluted Market Capitalization + Total Debt + Minority Interest + Preferred Stock – Cash and Short
Term investments
P/EA valuation ratio of a company stock price compared to its per share earnings. Calculated as Market Price /
Earnings per Share for the last annual period
Tangible Book Value Total Shareholder’s Equity – Goodwill and Intangible Assets