TRUCKING & MERGER & ACQUISITION PERSPECTIVES 1H 2019

800.644.1704 | bkdcapitaladvisors.com T&L M&A PERSPECTIVES 1H 2019

OVERVIEW & HIGHLIGHTS CONTENTS Industry Highlights Deal Activity • While e-commerce and the condensed consumer shipping delivery expectations are fueling growth, tariffs are slowing Public Comparables import traffic and adversely affecting volumes. Industrywide, Trucking downward pricing pressure continues Logistics • Driver labor shortages are still a top issue and firms using About BKD Capital Advisors independent contractors remain under heavy scrutiny BKD Services • Fuel expense continues to rise due to commodity price stabilization and higher taxes, thus pressuring profit margins ABOUT BKDCA • Technology investments are intensifying, particularly in the Founded in 1994, BKD Capital areas of driver safety and compliance, fleet management Advisors helps companies and and migrations to customer-centric cloud platforms stockholders go beyond their • Costs related to green initiatives are increasing as many numbers by creating value firms are trying to add alternative-fuel vehicles to enhance through investment banking efficiencies and satisfy customer requests/demands solutions that include mergers, acquisitions, sales, • We expect industry consolidation to gain momentum as recapitalizations, management smaller firms, outside of certain specialty niches, are buyouts and financings. challenged to compete and invest T&L CONTACTS

Deals by Segment 1H 2018 vs. 1H 2019 Gregory Lafin Managing Director Chicago, IL 630.282.9500 30.4% 30 [email protected]

23 Tony Schneider Logistics Managing Director , IN 317.383.4000 [email protected] 63.6% 18

11

Trucking 2019 2018

Source: S&P Capital IQ, Material Handling & Logistics

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DEAL ACTIVITY

Deals by Segment 1H 2019 Deals by Buyer Type 2010−1H 2019

60 41 52 51 31 26 Strategic 35 26 31 18 81% Financial 19% 49 54 41 48 39 42 29 34 34 30

2010 2011 2012 2013 2014 2015 2016 2017 2018 1H Logistics Trucking 2019

2019 YTD Select Deals by Segment

Date Target Buyer Trucking 08/13/2019 Jack Herod Trucking, LLC Stella Environmental Services, LLC 07/31/2019 Wayne T. Fellows, Inc./Fellows Truck Brokers, Inc. Kottke Trucking, Inc. 07/29/2019 Piston Tank Corporation TFI International Inc. (TSX:TFII) 07/22/2019 Logicorp Enterprises, LLC Outwest Express, LLC 07/11/2019 Carlisle Carrier Corporation Cowan Systems, LLC 05/13/2019 Jetco Delivery, Inc. The GTI Group 05/10/2019 Mergenthaler Transfer & Storage Co. Mesa Moving & Storage Co 05/07/2019 A&R Logistics, Inc. Wind Point Partners 04/22/2019 Michael's Cartage, Inc. Mason Dixon Intermodal, Inc. Logistics 08/07/2019 Paytronix Order & Delivery Paytronix Systems, Inc. 08/05/2019 Unitrans International Corporation AIT Worldwide Logistics, Inc. 07/11/2019 Cali Care Group Ltd. Belgravia Capital International Inc. (CNSX:BLGV) 07/08/2019 Champion International Moving, Ltd. Atlas World Group, Inc. 06/26/2019 Logistixs, Inc. / Space Center, Inc. Blackstone Real Estate Advisors 06/21/2019 Direct Shot Distributing, Inc. LEGACY Supply Chain Services, Inc. 06/20/2019 Global Transport Logistics, Inc. and Am Trans Expedite, Inc. Hudson Hill Capital 06/17/2019 Mesko Spotting Service, Inc. Lazer Spot, Inc. 01/29/2019 CityDash, LLC Brixey & Meyer Capital

Source: S&P Capital IQ

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DEAL ACTIVITY

Middle Market Truck Transportation & Distribution Deals EV/EBITDA Multiples 7.9x 6.9x 6.8x 6.3x 5.8x 5.4x 5.3x 5.0x

$10MM - $25MM $25MM - $50MM $50MM - $100MM $100MM - $250MM Truck Transportation Distribution Top 10 Strategic Buyers by Number of Top 10 Private Equity Buyers with Active Holdings Deals (2016–1H 2019) in Trucking/Logistics Segments # of # of Investor Name Acquisitions Investor Name Active GlobalTranz Enterprises, Inc. 8 Holdings Audax Group 7 TFI International Inc. 4 Kinderhook Industries 6 American Fast Freight, Inc. 3 HCI Equity Partners 5 CAI International, Inc. 3 Konza Valley Capital 5 , Inc. 3 Dicom Transportation Group, Capital For Business 4 3 L.P. Capital Partners 4 Echo Global Logistics, Inc. 3 MidStates Capital 4 Kuehne + Nagel International 3 Tenex Capital Management AG 4 LSC Communications, Inc. 3 The Carlyle Group 4 Magnate Worldwide, LLC 3 American Industrial Partners 3

Source: S&P Capital IQ, Pitchbook and GF Data (consists of middle market private equity transactions from 2006 to 2019)

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PUBLIC COMPARABLES

T&L Segments vs. S&P 500 Price Change

20.00% 15.00% 10.00% 5.00% 0.00% -5.00% -10.00%

Logistics S&P 500 Trucking

LTM EV/EBITDA NTM EV/EBITDA

S&P 500 12.4x S&P 500 14.8x

Logistics 9.7x Logistics 9.4x

Trucking 6.8x Trucking 14.9x

Average Revenue Growth 1H 2019 Average EBITDA Growth 1H 2019

12.3% 11.2% 9.5% 7.9% 8.3%

-2.5%

Trucking Logistics S&P 500 Trucking Logistics S&P 500

Source: S&P Capital IQ

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TRUCKING PUBLIC COMPARABLES

in millions of dollars Enterprise Values Recent Price Market TTM TTM Enterpris EBITDA EV to EV to Company Ticker (8/23/2019) Cap Revenue EBITDA e Value Margin Sales EBITDA ArcBest Corporation ARCB $28 $712 $3,084 $222 $767 7.19% 0.25 3.46 Covenant Transportation Group, Inc. CVTI 14 257 954 134 552 14.04% 0.58 4.12 Daseke, Inc. DSKE 2 100 1,792 164 907 9.15% 0.51 5.53 Heartland Express, Inc. HTLD 19 1,588 580 172 1,382 29.72% 2.38 8.02 J.B. Hunt Transport Services, Inc. JBHT 99 10,585 8,879 1,145 12,074 12.90% 1.36 10.54 Knight- Holdings Inc. KNX 32 5,499 5,188 1,002 6,579 19.32% 1.27 6.56 , Inc. LSTR 105 4,156 4,467 378 4,022 8.46% 0.90 10.65 Marten Transport, Ltd. MRTN 18 997 815 160 915 19.65% 1.12 5.71 Old Dominion Freight Line, Inc. ODFL 159 12,715 4,137 1,106 12,600 26.75% 3.05 11.39 P.A.M. Transportation Services, Inc. PTSI 51 295 540 101 494 18.77% 0.91 4.87 Roadrunner Transportation Systems, Inc. RRTS 8 309 2,076 -8 697 -0.38% 0.34 NM , Inc. SAIA 80 2,044 1,707 262 2,296 15.34% 1.35 8.77 USA Truck, Inc. USAK 8 64 541 51 256 9.40% 0.47 5.04 , Inc. WERN 31 2,125 2,500 476 2,477 19.05% 0.99 5.20 YRC Worldwide Inc. YRCW 2 80 5,006 204 1,172 4.07% 0.23 5.75 Median 0.91 5.73 Average 1.05 6.83 Average Large Cap (Over $10B) 2.20 10.97 Average Mid Cap ($2B - $10B) 1.13 7.79 Average Small Cap (Under $2B) 0.76 5.31

Ten-Year Average EV/EBITDA Ten-Year Average EV/Revenue Trucking Publics vs. S&P 500 Trucking Publics vs. S&P 500

12.6x 12.2x 12.4x 2.5x 2.5x 11.1x 2.4x 10.0x10.5x 2.0x 2.1x 8.8x 9.1x 1.9x 8.4x 8.2x 1.7x 1.6x 1.6x 1.5x

5.3x 5.2x 4.6x 4.9x 5.8x 7.0x 7.4x 10.6x12.9x11.7x 0.6x 0.5x 0.5x 0.5x 0.5x 0.7x 0.8x 1.0x 1.0x 0.9x

Source: S&P Capital IQ

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LOGISTICS PUBLIC COMPARABLES

in millions of dollars Enterprise Values Recent Price Market TTM TTM Enterpris EBITDA EV to EV to Company Ticker (8/23/2019) Cap Revenue EBITDA e Value Margin Sales EBITDA Air Transport Services Group, Inc. ATSG $20 $1,172 $1,169 $382 $2,615 32.66% 2.24 6.85 Atlas Air Worldwide Holdings, Inc. AAWW 26 666 2,765 530 3,534 19.16% 1.28 6.67 C.H. Robinson Worldwide, Inc. CHRW 82 11,132 16,090 1,037 12,301 6.44% 0.76 11.86 Echo Global Logistics, Inc. ECHO 19 521 2,320 74 697 3.18% 0.30 9.45 Expeditors International of Washington, Inc.EXPD 68 11,664 8,382 853 10,959 10.17% 1.31 12.85 FedEx Corporation FDX 152 39,644 69,693 4,934 54,906 7.08% 0.79 11.13 Forward Air Corporation FWRD 58 1,646 1,355 160 1,838 11.83% 1.36 11.47 Hub Group, Inc. HUBG 41 1,394 3,806 261 1,582 6.85% 0.42 6.07 Radiant Logistics, Inc. RLGT 4 219 920 38 254 4.11% 0.28 6.71 , Inc. UPS 111 95,557 72,500 7,609 116,680 10.50% 1.61 15.33 XPO Logistics, Inc. XPO 67 6,151 17,082 1,573 13,727 9.21% 0.80 8.73 Median 0.80 9.45 Average 1.01 9.74 Average Large Cap (Over $10B) 1.12 12.80 Average Small Cap (Under $2B) 0.98 7.87

Ten-Year Average EV/EBITDA Ten-Year Average EV/Revenue Logistics Publics vs. S&P 500 Logistics Publics vs. S&P 500

12.2x12.6x12.4x 2.5x 11.1x 2.4x 2.5x 10.5x 10.0x 2.0x 2.1x 8.8x 9.1x 1.9x 8.4x 8.2x 1.7x 1.6x 1.6x 1.5x

10.5x 9.2x 8.7x 12.6x10.7x10.4x 9.2x 11.2x11.2x11.4x 1.2x 1.2x 1.1x 1.2x 1.3x 1.3x 1.3x 1.4x 1.4x 1.2x

Source: S&P Capital IQ

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CONTACT US – T&L TEAM INDUSTRY FOCUS

Gregory Lafin Tony Schneider Managing Director Managing Director Chicago, IL Indianapolis, IN 630.282.9500 317.383.4000 [email protected] [email protected]

ABOUT US Manufacturing & Business Distribution Services The professionals of BKDCA have more than 200 years of combined experience helping company owners plan for and execute their growth and exit strategies. From managing the sale of a company to negotiating the acquisition of a competitor or raising debt and equity capital to improve financial and operational flexibility, BKDCA can help you develop a specific course of action for achieving your desired results.

BKDCA, a wholly owned subsidiary of BKD, LLP, helps companies and stockholders go beyond their numbers by creating value through investment banking solutions that include mergers, acquisitions, sales, recapitalizations, management buyouts and financings. Financial Health Services Care Founded in 1994, BKDCA is staffed with experienced investment bankers and financial analysts. In addition, the firm draws on the resources of BKD with its network of accountants, auditors, tax professionals, business consultants and industry-specific consultants.

Construction & Energy Engineering

BKD Office Consumer Technology, BKD/BKDCA Office Services & Media & Products Telecom BKDCA is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.

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BKD SERVICES Abundant services. Sheer precision.

BKD, LLP offers a full range of services and industry-focused expertise to provide you with insightful solutions and help you stay a cut above the competition.

FINANCIAL INTERNATIONAL TAX INTERNATIONAL MARKET STRATEGIES • Development • DISC • Exporting ASSURANCE • Expatriate assignment • Direct investment • Audit, review & compilations services • Licensing • Benchmarking • Foreign tax credit planning • Acquisitions • Internal audit • Global structuring support • Internal control studies • Indirect global taxes OPERATIONS MANAGEMENT • SEC filings • Transfer pricing • SOX 404 compliance INVESTMENT & FINANCIAL PERFORMANCE ENHANCEMENT CONSULTING PLANNING ADVICE & KNOW-HOW (PEAK) • Accounting outsourcing • Estate & gift planning METHODOLOGY • Bankruptcy consulting • Family tax planning • Business process improvement • Budgeting & financial planning • Investment management • Decision costing • Cost accounting • Personal wealth planning • Inventory optimization • Employee benefit plan • Retirement planning • Lean manufacturing structuring & administering • Profit improvement • ESOP feasibility analysis TRANSACTION SERVICES • Forecasts & projections • Federal, state & local tax TECHNOLOGY diligence FEDERAL & STATE TAX • Financial diligence PLANNING & COMPLIANCE APPLICATIONS SOFTWARE • Operations diligence • Best-Abra • Compensation planning • Technology diligence • Corporate tax planning • MAS 90, 200 & 500 • Inventory tax planning GROWTH & ADVISORY • Microsoft CRM • R&D tax credit enhancements • Microsoft Dynamics AX • Microsoft Dynamics GP • Real estate cost segregation INVESTMENT BANKING studies • Mergers & acquisitions IT SERVICES • Restructuring planning • Company sales & divestitures • IT assessments & planning • State & local tax planning • Debt & equity recapitalizations • IT control reviews FORENSICS & VALUATION • Management buyouts • Project management assistance • Security solutions & penetration CONSULTING • Affiliations testing • Bankruptcy services • Succession planning • Business valuations • Strategic options analysis STRATEGIC TECHNOLOGY • Fraud prevention ECONOMIC DEVELOPMENT • E-business planning • Litigation support • Expansion projects • IT assessments & planning • Grants & public incentives • Systems selection & implementation

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