As we develop the trucking and logistics marketplace the total market of buyers and sellers begins to shrink. In our case we attempt to contact close to 300 trucking/logistics company a week to determine “who is buying” and “who is selling” or “is there a need for capital to buy…”. The market remains active as it appears that those who held off selling in the recent down years are now ready to make a move. The possible expiration of the 15% Capital Gains rate is an incentive as well.
While there are many sellers, the typical type of deal in this industry has included senior bank debt, a small amount of equity and a sellers Note. This doesn’t sit well with many sellers and creates a significant opportunity for Clarke, whose experience was first on the capital side prior to its focus on Transportation.
We are also seeing many local SW companies still having problems with bank loans and have sources for non-bank private debt.
The market is coming back strong and the next 18 months are likely to be the last for low valuations on acqusitions as many companies are accelerating in growth and EBITDA multiples.