Transportation and logistics provider Werner Enterprises Inc. is expanding its footprint in the Mid-Atlantic, Ohio, and Northeast regions, announcing Thursday that it will acquire an 80% ownership stake in the regional truckload carrier ECM Transport Group for a purchase price of $142.4 million.
Omaha, Nebraska-based Werner also retains an exclusive option to buy the remaining 20% of ECM after a period of five years. For that price, the company gains possession of Cheswick, Pennsylvania-based ECM’s two units—ECM Transport and Motor Carrier Services of Pennsylvania (MCS)—which together operate nearly 500 trucks and 2,000 trailers in their network of 8 terminals and 18 drop yard facilities.
That large scale will have an impact even on a company of Werner’s size, where it is set to boost Werner’s overall fleet by more than 6% and increase its coverage for regional short-haul freight in those geographic markets.
“The addition of ECM’s skilled drivers, non-driver associates and terminal network strengthens our portfolio by adding short-haul expertise in a segment in which consumer demand and supply chain needs are growing,” said Derek Leathers, Chairman, President and Chief Executive Officer. “This transaction delivers on our ‘5 Ts + S’ strategy and will position us for further growth as we capitalize on positive market dynamics for the remainder of 2021 and beyond.”
Werner often cites a commitment to investing in its “5Ts + S strategy,” which includes trucks, trailers, talent, terminals, and technology, as well as sustainability.
The company has made a number of strategic moves in recent months to position itself within the industry, in 2020 extending its last-mile service into Canada and launching a technology and innovation arm. More recently, Werner sold off its freight forwarding division to focus on its North American logistics business and bought an ownership stake in the autonomous trucking technology company TuSimple.
Investors applauded the latest move, saying the ECM price tag was fair and its network would expand Werner’s existing routes.
“Management had clearly messaged an openness to bolt-on deals and landed a solid strategic/financial fit in ECM,” Garrett Holland, a senior research analyst with Baird Equity Research, said in a release. “The deal is nicely accretive to financial results… and the company’s competitive position, but manageable in size, which minimizes integration risk.”
According to Baird, the new freight and geographic coverage are complementary to Werner’s existing footprint and increasingly important to e-commerce supply chains and forward deployment of inventory.