Knight-Swift Transportation Holdings Inc. (NYSE: KNX) has announced the acquisition of the operating assets and certain liabilities of the non-union regional less-than-truckload (LTL) division of Dependable Highway Express, Inc. (DHE) based in Los Angeles, California. The acquisition is expected to be immediately accretive to Knight-Swift’s earnings per share.
The strategic acquisition is set to significantly expand Knight-Swift's LTL terminal and door counts by approximately 10%, while also broadening the company's network's coverage of the US population to approximately 70%. The financial terms of the acquisition were not disclosed, but it is estimated that DHE generated approximately $122 million in total operating revenue over the past twelve months with an operating margin of approximately 10%.
Following the acquisition, the DHE associates and assets will operate as a separate brand under the AAA Cooper corporate group. Joe Finney, who served as the chief operating officer of DHE prior to the transaction, will continue leading DHE as its president. Dependable CEO Ronald Massman expressed pride in the legacy built by the DHE LTL team and highlighted the strategic merit of joining Knight-Swift's platform, stating that the entire Knight-Swift organization epitomized their core values of integrity, service, and diversity.
Knight-Swift CEO Adam Miller emphasized the significance of the acquisition in expanding the company's network to include key southwest markets of California, Arizona, and Nevada. He expressed excitement about the strategic value of acquiring a strong southwest competitor like DHE, noting that it significantly expands the customers they can serve. Miller also underscored the importance of connecting DHE with their existing AAA Cooper and MME businesses to provide seamless coast-to-coast service to customers.
Dependable's LTL division operated within the broader integrated services offering of Dependable Supply Chain Services, an affiliated group of asset-based third-party logistics providers founded over 70 years ago. Post-transaction, Dependable will continue to operate its full truckload, warehousing and distribution, harbor drayage, and third-party logistics businesses under its existing branding.
Knight-Swift Transportation Holdings Inc. is known as one of North America's largest and most diversified freight transportation companies, providing multiple truckload transportation, less-than-truckload, logistics, and business services to the shipping and transportation sectors. With the completion of this acquisition, it is clear that Knight-Swift is taking pivotal steps to expand its footprint and strengthen its position in the LTL market. Following these announcements, the company's shares moved 4.1%, and are now trading at a price of $54.39. If you want to know more, read the company's complete 8-K report here.
