CEO of USA Truck: Merger with the German company “Match Made in Heaven” | Arkansas Business News

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James Reed, CEO of USA Truck Inc. in Van Buren, said the acquisition of the transport company by German global logistics giant DB Schenker was a “validation” of USA Truck’s business strategy in recent years.

DB Schenker of Essen, Germany, announced it would acquire USA Truck for $31.76 per outstanding share – approximately $290 million – and the assumption of the company’s debt. The two companies said the total transaction value would be approximately $435 million.

USA Truck’s Board of Directors unanimously approved the acquisition by DB Schenker. USA Truck’s stock price closed Thursday at $14.58, but jumped to over $30 after the acquisition was announced on Friday.

“We think this is a validation of the plan we came up with and the strategy we laid out,” Reed said. “We did everything we said we would do and the market never really reacted the way we expected, but DB Schenker saw the real value that was locked in this business. It’s just a match made in heaven.

Reed, CEO since January 2017, led a turnaround that saw USA Truck emerge from the lackluster financial years of a decade ago to achieve solid profitability. USA Truck posted revenue of $710.4 million and revenue of $24.8 million for fiscal 2021, and it has had seven consecutive profitable quarters.

DB Schenker is a subsidiary of Deutsche Bahn Essen, and USA Truck will operate as a private subsidiary of DB Schenker. USA Truck will be delisted from NASDAQ, and Reed said he does not expect any changes in management or personnel at the company.

“It’s business as usual,” Reed said. “We feel really well prepared and very well staffed for the future.”

DB Schenker is the world’s fourth largest group but has no significant presence in the United States. In January 2021, executives told Freightwaves it would begin expansion plans through acquisitions in 2022 to enter in-state trucking markets and cross-border markets with Canada and Mexico. .

USA Truck has 2,100 employees and more than 1,800 tractors.

“USA Truck is a perfect fit with DB Schenker’s strategic ambition to expand our network in North America and strengthen our position as a global logistics leader,” said Jochen Thewes, CEO of DB Schenker. “Together, we will enhance our shared value proposition and invest in exciting growth opportunities and sustainable logistics solutions for new and existing customers.”

Reed said the two companies had a “well-verified process” before announcing the acquisition and said all additional details will be in a USA Truck proxy statement within the next 20 to 45 days.

“They came out announcing their intentions in the US market,” Reed said. “For some reason it didn’t quite land as planned. They have global aspirations and they want the same type of presence in the United States. They were looking for a platform to build on. What an honor for them to see us from this angle.

“They want to be the #1 or #2 transportation provider in the United States. It is a start for them to achieve their aspirations.

USA Truck was established in 1983 as a subsidiary of what is now ArcBest Corp. of Fort Smith. Former ArcBest executive Bob Powell bought USA Truck in 1989 and the company went public in 1992.

The company fell on hard times between 2009 and 2013 when it posted five consecutive years of losses. He hired John Simone as CEO in February 2013 to engineer a turnaround amid a hostile takeover bid by Knight Transportation Inc. of Phoenix.

Simone didn’t live to see the turnover as he died of lung cancer in 2016, and USA Truck went through three CEOs in his wake before promoting Reed to the top spot in January 2017.

“This transaction recognizes the culture of excellence that James, his team, and all of our dedicated employees have created and commit to every day at USA Truck,” said USA Truck President Alexander Greene. “It rewards our shareholders for their unwavering support during our turnaround and during the pandemic and provides a new opportunity for our customers to leverage the strengths of USA Truck by utilizing the resources and reach of one of the world’s leading logistics service organizations. in the world.”

Reed said when he met with DB Schenker executives in preparation for the acquisition, they talked about culture rather than operations and financial matters. He said DB Schenker was “super people focused”.

“Ultimately, our job is to ensure the health of the business and maximize shareholder value,” Reed said. “We always thought we had created an underrated franchise in capital markets. When this opportunity presented itself, we thought it was prudent to explore it. We couldn’t be happier.

James R. Rhodes