TRUCKING & LOGISTICS MERGER & ACQUISITION PERSPECTIVES 1H 2018

800.644.1704 | bkdcorporatefinance.com OVERVIEW & HIGHLIGHTS CONTENTS Merger and acquisition (M&A) activity in the trucking and logistics market remained stable in the first half of 2018 compared to the Deal Activity same period in 2017. The trucking sector’s activity showed a modest Public Comparables decline, while the logistics sector grew at a meaningful pace. The overall sector remains strong as industry demand continues to Trucking outpace capacity. Carriers are becoming extremely selective at designating specific routes and keeping only customers with the Logistics greatest profit potential. Growth is mainly realized through price About BKD Corporate Finance increases rather than volume as many carriers are operating at nearly full capacity. BKD Services Industry Highlights • Carriers are taking advantage of a strong seller’s market by raising ABOUT BKDCF freight rates more than 6 percent annually over the past five years Founded in 1994, BKD Corporate • Strong economy, along with surging demand and record demands Finance helps companies and are causing capacity shortages among logistics operations stockholders go beyond their • While diesel prices increases are negative for carriers, price numbers by creating value through increases and strong demand have significantly outweighed the investment banking solutions that additional operating costs include mergers, acquisitions, • T&L industry is seeing major disruptions, such as Uber Freight, sales, recapitalizations, which provides on-demand freight services, as well as an electric management buyouts and semitruck from Tesla that has a range of more than 500 miles. financings. • Concern over cyberthreats are growing, as CEOs recognize that carrier legacy systems are more vulnerable to cyberattacks T&L CONTACTS

Gregory Lafin Deals by Segment 1H 2017 vs. Managing Director 1H 2018 Chicago, IL 630.282.9500 [email protected] 23 27.8% 18 Tony Schneider Managing Director Logistics , IN 317.383.4000 [email protected]

31.3% 11

16 Trucking 2018 2017

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

bkdcorporatefinance.com 2 DEAL ACTIVITY

Deals by Segment 1H 2018 Deals by Buyer Type 2009−1H 2018

49 41 36 50 46 Strategic 29 35 20 31 85% Financial 52 59 51 15% 35 41 23 32 31 24 29 11 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H 2018 Trucking Logistics

2018 YTD Select Deals by Segment Date Target Buyers Trucking 7/17/18 Manna Freight Systems, Inc. Pilot Freight Services, Inc. 7/11/18 Walt's Drive-A-Way Services, Inc. Warehouse Services, Inc. 6/27/18 Prime EFS LLC Transportation and Logistics Systems, Inc. (OTCPK:PTRA.D) 6/6/18 1-800-Pack-Rat, LLC Zippy Shell Incorporated Northern Virginia, Maryland Domestic, Commercial And 5/11/18 Hilldrup Companies, Inc. Storage Operations of Suddath Van Lines, Inc. 4/3/18 Normandin Transit TFI International 3/22/18 Artex Inc. Crozier Fine Arts Inc. 3/17/18 P & S Transportation, LLC OEP Capital Advisors, L.P. 3/16/18 Abilene Motor Express, Inc. Knight Transportation Inc. 2/23/18 Central Arizona Freight Red Arts Capital 2/15/18 Tidewater Logistics Corporation Apollo Global Management, LLC (NYSE:APO) 2/2/18 Fore Transportation, Inc. Universal Logistics Holdings, Inc. (NasdaqGS:ULH) Logistics 6/20/18 Epes Transport Systems Penske Logistics 6/5/18 GlobalTranz Enterprises The Jordan Company 6/5/18 Service Cold Storage Lineage Logisics 6/4/18 Pensacola Stevedore Co. Logistec Corp 5/15/18 Peach State Integrated Technologies Bastian Solutions 5/14/18 Source One Management Services Corcentric LLC 4/30/18 ROAR Logistics Redwood Logistics 4/3/18 MXD Group 3/31/18 Azuga Sumeru Equity Partners 3/15/18 Freight Force St. George Logistics 3/6/18 Jarvis Trans RoadOne Source: S&P Capital IQ

bkdcorporatefinance.com 3 DEAL ACTIVITY

Middle Market Truck Transportation & Distribution Deals EV to 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 Top 10 Private Equity Buyers with Active of Deals (2015–1H 2018) Holdings in Trucking/Logistics Segments # of # of Active Segment Investor Name Investor Name Acquisitions Holdings Investment Interest GlobalTranz Enterprises, Inc. 4 Platinum Equity 7 Logistics Radiant Logistics, Inc. 3 (AMEX:RLGT) The Jordan Company 6 Logistics Magnate Worldwide, LLC 3 HCI Equity Partners 5 Trucking & Logistics CAI International, Inc. 3 Eos Partners 4 Logistics (NYSE:CAI) , Inc. (NYSE:CGI) 3 Comvest Partners 4 Logistics Dicom Transportation Group, 3 Audax Group 4 Logistics L.P. H.I.G. Capital 4 Logistics Kuehne + Nagel International 2 AG (SWX:KNIN) Oak Hill Capital Partners 4 Logistics ABF Logistics II, Inc. 2 Linx Partners 4 Trucking & Logistics Blue-Grace Logistics LLC 2 CRST International, Inc. 2 LongueVue Capital 4 Logistics

Source: S&P Capital IQ, Pitchbook and GF Data (consists of middle market private equity transactions from 2005 to 2018)

bkdcorporatefinance.com 4 PUBLIC COMPARABLES

T&L Segments vs. S&P 500 10.00% Price Change

5.00%

0.00%

-5.00%

-10.00%

-15.00%

Trucking Logistics S&P 500

LTM EV/EBITDA NTM EV/EBITDA

Trucking 8.9x 6.5x

Logistics 12.7x 10.1x

S&P 500 12.8x 10.9x

Average Revenue Growth 1H 2018 Average EBITDA Growth 1H 2018

14.6% 15.0% 15.6% 13.3% 11.6%

8.4%

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

Source: S&P Capital IQ

bkdcorporatefinance.com 5 TRUCKING PUBLIC COMPARABLES

in millions of dollars Enterprise Values

Recent Price TTM TTM Enterprise EBITDA EV to EV to Company Ticker (7/31/2018) Revenue EBITDA Value Margin Sales EBITDA Daseke, Inc. DSKE $8.69 $1,013 $104 $1,007 10.27% 0.99 9.68 P.A.M. Transportation Services, Inc. PTSI 54.55 475 66 488 13.84% 1.03 7.44 ArcBest Corporation ARCB 46.55 2,948 199 1,218 6.75% 0.41 6.12 Covenant Transportation Group, Inc. CVTI 28.98 752 118 707 15.65% 0.94 6.01 Heartland Express, Inc. HTLD 19.19 660 145 1,470 22.01% 2.23 10.12 J.B. Hunt Transport Services, Inc. JBHT 119.90 7,921 1,109 14,100 14.00% 1.78 12.72 , Inc. LSTR 111.15 4,229 331 4,531 7.82% 1.07 13.70 Marten Transport, Ltd. MRTN 21.85 737 138 1,172 18.76% 1.59 8.47 Old Dominion Freight Line, Inc. ODFL 146.80 3,723 892 11,971 23.96% 3.22 13.42 , Inc. SAIA 75.35 1,513 210 2,059 13.85% 1.36 9.83 USA Truck, Inc. USAK 21.82 498 42 267 8.38% 0.54 6.40 , Inc. WERN 37.25 2,278 384 2,761 16.88% 1.21 7.18 YRC Worldwide Inc. YRCW 9.74 5,001 251 1,127 5.01% 0.23 4.49 Knight- Holdings Inc. KNX 32.55 4,484 753 6,550 16.80% 1.46 8.69 Roadrunner Transportation Systems, Inc. RRTS 2.19 2,210 -30 545 -1.36% 0.25 NM Median 1.07 8.58 Average 1.22 8.88 Average Large Cap (Over $10B) 2.50 13.07 Average Mid Cap ($2B - $10B) 1.25 9.86 Average Small Cap (Under $2B) 0.96 7.62 Ten-Year Average EV/EBITDA Ten-Year Average EV/Revenue Trucking Publics vs. S&P 500 Trucking Publics vs. S&P 500 13.1x 2.6x 12.2x 2.4x 11.1x 10.5x 2.0x 2.1x 10.0x 1.9x 9.1x 8.8x 8.4x 1.7x 7.8x 8.2x 1.6x 1.6x 1.5x 1.3x

7.0x 9.3x 7.4x 7.0x 7.7x 8.9x 7.8x 6.9x 8.5x 11.1x 0.6x 0.8x 0.8x 0.8x 1.0x 1.2x 1.1x 1.0x 1.2x 1.5x

Average of Trucking Average of S&P 500 Average of Trucking Average of S&P 500

Source: S&P Capital IQ

bkdcorporatefinance.com 6 LOGISTICS PUBLIC COMPARABLES

in millions of dollars Enterprise Values

Recent Price TTM TTM Enterprise EBITDA EV to EV to Company Ticker (7/31/2018) Revenue EBITDA Value Margin Sales EBITDA Forward Air Corporation UPS $63.90 $1,188 $153 $1,896 12.86% 1.60 12.42 Expeditors International of Washington, Inc. FDX 76.17 7,515 811 12,175 10.79% 1.62 15.01 C.H. Robinson Worldwide, Inc. CHRW 92.23 15,946 898 13,938 5.63% 0.87 15.52 FedEx Corporation XPO 245.87 65,450 8,343 78,703 12.75% 1.20 9.43 Hub Group, Inc. EXPD 46.40 4,494 191 1,861 4.25% 0.41 9.74 , Inc. ZTO 119.89 69,004 9,735 117,495 14.11% 1.70 12.07 XPO Logistics, Inc. FWRD 99.72 16,636 1,397 17,621 8.40% 1.06 12.61 Atlas Air Worldwide Holdings, Inc. ATSG 67.05 2,420 492 3,848 20.34% 1.59 7.82 Echo Global Logistics, Inc. AAWW 34.45 2,269 65 1,154 2.89% 0.51 17.62 Air T, Inc. HUBG 32.75 195 7 111 3.56% 0.57 16.04 Universal Logistics Holdings, Inc. ECHO 33.50 1,328 104 1,209 7.86% 0.91 11.59 Radiant Logistics, Inc. RLGT 3.99 810 24 238 2.95% 0.29 9.95 Median 0.98 12.24 Average 1.03 12.48 Average Large Cap (Over $10B) 1.29 12.93 Average Small Cap (Under $2B) 0.84 12.17

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

13.1x 12.2x 2.6x 11.1x 2.4x 10.5x 10.0x 2.0x 2.1x 8.8x 9.1x 1.9x 8.4x 8.2x 1.7x 7.8x 1.6x 1.6x 1.5x 1.3x

7.9x 10.2x 9.0x 8.5x 13.0x10.5x10.5x 9.2x 11.3x12.1x 0.9x 1.2x 1.2x 1.1x 1.2x 1.3x 1.3x 1.3x 1.4x 1.5x

Average of Logistics Average of Logistics Average of S&P 500 Average of S&P 500

Source: S&P Capital IQ

bkdcorporatefinance.com 7 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 The professionals of BKDCF have more than 200 years of combined experience & Services helping company owners plan for and execute their growth and exit strategies. Distribution 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, BKDCF can help you to develop a specific course of action for achieving your desired results.

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BKDCF, 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.

Founded in 1994, BKDCF 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 Consumer Technology, industry-specific consultants. Services & Media & Products Telecom BKDCF is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.

bkdcorporatefinance.com 8 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.

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