Chattanooga, Tenn. (July 5, 2018) — Covenant Transportation Group, Inc. announced this week that it has completed the acquisition of Landair Holdings, Inc. (“Landair”) of Greeneville, Tennessee, the holding company for Landair Transport, Inc. and Landair Logistics, Inc.
Landair is a leading dedicated and for-hire truckload carrier, as well as a supplier of 3PL transportation, warehousing and logistics inventory management services. Under the terms of the agreement, CTG purchased 100 percent of Landair’s outstanding stock in exchange for approximately $83 million in cash.
At closing, Landair also had approximately $15.5 million of debt, which CTG has refinanced.
Landair was founded in 1981 by Scott Niswonger and Ed Sayler. Presently, Landair operates approximately 430 trucks and 900 trailers, as well as managing 12 distribution facilities covering approximately 1.8 million square feet of warehouse space.
Landair also has a safe and experienced corps of professional drivers. Landair generated approximately $121 million in total revenue for the year ended Dec. 31, 2017. Approximately $60 million of Landair’s fiscal 2017 total revenue related to dedicated truckload operations, $41 million related to managed freight services, and the remaining $20 million related to one-way truckload operations.
The Landair acquisition is expected to be immediately accretive to CTG’s earnings. CTG’s estimate of Landair’s pro forma fiscal 2018 EBITDA is a range of $18.5 to $19 million. The transaction is expected to add in the range of 4 cents to 8 cents per diluted share to CTG’s consolidated earnings for the second half of fiscal 2018, and 16 cents to 20 cents per diluted share to consolidated earnings for the full fiscal 2019 year.
Cost reduction opportunities at Landair have been identified in equipment, fuel, workers’ compensation and casualty insurance, over the road services, and other areas. The range of earnings accretion expectations should narrow as additional information becomes available concerning the allocation of intangibles and determination of the magnitude of non-cash amortization associated with the acquisition, as well as the pace at which we will be able to drive cost and revenue synergies through the combined organization.
For more information about the acquisition, visit www.covenanttransport.com/investors.