subject: Ahern and Associates Outlines Additional Priniciples to Selling a Trucking Company [print this page] When a transportation analyst begins the process, in introducing a Seller to a client; they should already has a "stable" of qualified Buyers. The buyers provide a specific criteria, of what they are looking for; what type of rate of return they anticipate, and if the sale is to be a capacity or a strategic purchase.
Many times a Seller hires a transportation analyst to create more value, and in that situation they will visit the Seller on-site and review all facets of the "operations", including their people; rating structure, fuel surcharge, dispatching, maintenance, trucking utilization, empty miles, etc.
As I stated, previously, 60%-70% of all transportation sales are asset sales. Don't demand a stock sale, or you will be eliminating 60%-70% of the market. Start with a "pool" of money, and work backwards and recognize that you will receive a certain value for your customer base, "Goodwill", and infrastructure;
You will be required to liquidate your balance sheet; and whatever the liquidation value is it is yours to keep.
If you are a non-asset based company, and you have had historically strong EBITDA earnings, you can expect to receive 3 to 4 times EBITDA, plus your liquidated balance sheet. (Companies over $100MM of revenue and a very strong EBITDA may possibly obtain 5 times EBITDA- but it is rare today)
It is important to understand that when you liquidate your balance sheet, if you are sold to a Private Equity Firm, they require a certain amount of working capital left in the business after the sale.
If you sell to a traditional trucking or logistics Buyer, they may pay 1 to 2 times average earnings plus assets less debt; for a historically profitable company.
If you want to stay with the company, and go forward, then a separate employment agreement is negotiated with a salary and bonus based upon results.
If you are a larger business, and you want to maximize your value you may need to review, (initially) a Private Equity fund Buyer since each Private Equity Firm is different and each has their own "threshold";
There are ways to create more value, working with a Private Equity Firm, if you are willing to stay with the company, for an additional 5-7 years, and you are willing to "roll" equity back into the deal.
Ahern and Associates Outlines Additional Priniciples to Selling a Trucking Company
