Iowa-based Heartland Express Inc. is acquiring Gordon Trucking Inc. for approximately $300 million, the companies announced via press release on Monday, Nov. 11.
With combined total revenue of approximately $1 billion and a terminal network spanning from Washington to Florida and from Pennsylvania to Southern California, Heartland estimates the combined companies will operate the fifth-largest asset-based truckload fleet in North America.
The acquisition solidifies a West Coast operations base for Heartland, which previously had no facilities in that region.
GTI is a truckload carrier headquartered in Pacific, Wash. Founded by the Gordon family in 1946, the family remains actively involved in the business, which is primarily focused on dry van loads. However, roughly 20 percent of its business also comes from refrigerated loads and from freight brokerage operations. GTI’s equipment includes approximately 2,000 tractors and 6,500 trailers.
“GTI’s service center network is concentrated in strategic markets in the western United States, with major locations in Washington, Oregon, Northern California, Southern California and Idaho,” the release stated. “These locations have no overlap with Heartland’s locations and are expected to provide substantial geographic diversity to Heartland’s overall operations.”
GTI owners Larry and Virginia Gordon will retire, with Larry Gordon joining Heartland’s Board of Directors. Their sons, Steve and Scott Gordon, have joined Heartland’s management team.
Heartland acquired the company with about $300 million in cash, Heartland stock and assumed GTI debt, and an additional $60 million in net present value of expected future cash tax savings.
Heartland expects to use about $165 million of its cash reserves and have about $95 million in outstanding debt after the transaction and repayment of assumed debt, according to the release
The release notes that GTI has major customers that include Georgia Pacific, General Mills, Pepsi, Walmart and Unilever. Of GTI’s 10 largest customers by revenue, only five are among Heartland’s top 10 accounts.