Equity buyer combines Dawes, Roadrunner
Roadrunner Freight Systems Inc and Dawes Transport Inc will be merged after a
The merger will provide Roadrunner-Dawes immediate expansion of the national footprint for both companies, bolstering their ability to be more responsive to customer needs, said Alan McBride, president and chief executive officer of Dawes Transport, who will hold the same titles with the merged companies.
Thayer Capital Partners purchased Cudahy-based Roadrunner Freight Systems from American Capital Strategies Ltd., a
Thayer purchased Milwaukee-based Dawes Transport from the Murphy family in a deal that closed in March 31.
Terms weren't disclosed for either transaction.
The combined companies will operate as RoadRunner-Dawes. The merger of the carriers creates a company that is expected to generate revenue of nearly $365 million in 2005. Individually Dawes had been expected to generate $202 million in revenue this year, with RoadRunner's sales expected to be about $163 million.
Barry Turner, president of RoadRunner Freight, will server as chief operating officer. McBride, who took over as president and CEO 10 years ago, said he has been pushing for a merger between Dawes and RoadRunner for several years. "I thought the deal should have been put together for a long time," he said. "It's natural marriage."
RoadRunner runs terminals in
Dawes has terminals in
The terminals will be merged in cities where Dawes and RoadRunner overlap, McBride said. The
"There's tremendous growth, potential in
RoadRunner-Dawes also plans to open a terminal to serve the
For now, the merged company will continue to run the RoadRunner terminal on
However, the company plans to eventually consolidate its
The merged companies will have a total of about 1,000 employees nationwide. Including 200 in the
Combining RoadRunner and Dawes "makes a lot of sense," said Dick Armstrong, president of Armstrong & Associates, a
"Both companies have had very decent profitability," he said. Armstrong said he expects RoadRunner-Dawes to grow, but at a nominal rate due to the maturity of the market and increased competition from shippers such as Atlanta-based United Parcel Service Inc, and Memphis-based FedEx Corp.
RoadRunner-Dawes will continue to focus mainly on providing delivery service of less-than-truckload shipments in which it takes loads for several customers to destinations of more than 500 miles. The company ships direct to customers without stopping at a break bulk, a large terminal where freight is sorted and reloaded.
McBride said he expects Thayer Capital to maintain ownership of RoadRunner-Dawes for five to seven years.
Thayer manages three private equity funds totaling approximately $1.5 billion. The firm manages buyouts, consolidations and growth equity investments focusing on industrial products and services.
Thayer Capital management didn't return calls seeking comment.
RoadRunner began operating in 1984 with a single terminal in
Management of American Capital Strategies, which help the controlling interest in Roadrunner, didn't return a call seeking comment. Members of the Murphy family, which founded and continued to own Dawes until the recent sale, couldn't be reached for comment.
Dawes and Roadrunner were ranked 95th and 100th respectively, in 2004 edition of Transport Topics' top 100