Heartland Express has recently acquired Washington-based Interstate Distributor Co. in a transaction valued at approximately $113 million, according to a press release.
Interstate, a dry van truckload company, was founded in 1933 and works primarily in the western and southeastern regions of the country. Its fleet consists of approximately 1,350 company tractors, 220 tractors supplied by independent contractors, and 4,700 trailers.
Founded in 1978, Iowa-based Heartland Express focuses on medium to short haul regional freight. The company’s drivers have an average experience level of more than nine years, according to its website.
“Heartland will gain significant additional traffic density in the West, and our stronger eastern network will improve service for (Interstate’s) customers in the East,” Michael Gerdin, chairman, president and CEO of Heartland, said in a statement.
With a 2016 revenue of $325 million, Interstate’s headquarters and national terminal network locations overlap with Heartland locations and will be consolidated over the next 18 months. Numerous Interstate drop yards will be eliminated, according to a press release.
The $113 million transaction value includes approximately $94 million in cash for the equity, $23 million in assumed debt and $4 million of acquired cash. After Heartland pays off Interstate’s debt, the trucking company will be debt-free with a cash balance of $50 million to $170 million of availability on its revolving line of credit.
Heartland acquired Interstate from Saltchuk, who acquired the company in 2012.
“Ultimately, we decided to look for a new home for Interstate to allow us to focus investment in other areas of our business,” Mark Tabbutt, chairman of Saltchuk, said in a statement. “Heartland offered not only a strategic fit for the business that would allow it to grow but a good cultural match for the team.”
Copyright © OOIDA