Knight-Swift Transportation Acquires Regional LTL Carrier Dependable Highway Express
PHOENIX – (Trailer Technician)–Effective July 30, 2024, Knight-Swift Transportation Holdings Inc. (NYSE: KNX) (“Knight-Swift” or the “Company”) acquired the operating assets and assumed certain liabilities of the non-union regional less-than-truckload (“LTL”) division (“DHE”) of Dependable Highway Express, Inc. (“Dependable”), based in Los Angeles, California. The acquisition is expected to be immediately accretive to Knight-Swift’s earnings per share.
Knight-Swift CEO, Adam Miller, commented, “We are excited to take the next step toward building a nationwide LTL business, and especially to grow our network to include the key Southwest markets of California, Arizona, and Nevada. This transaction increases our LTL terminal and door counts by approximately 10% and brings our network’s coverage of the US population to approximately 70%. The strategic value of acquiring a strong Southwest competitor like DHE is meaningful given the impact to our coverage area significantly expands the customers we can serve as well as the difficulty of building or acquiring LTL facilities in many of these locations. DHE will connect with our existing AAA Cooper and MME businesses to provide seamless coast-to-coast service to our customers.
“I want to welcome the DHE employees to the Knight-Swift family and look forward to working together to deliver creative solutions and excellent service to even more customers. Coupling the proud DHE brand with our resources, network, and scale should represent expanded opportunities for employees and enhanced offerings for customers. We are grateful for the efforts of many at Knight-Swift, AAA Cooper, and DHE who have worked to bring this transaction to fruition and who will continue to work together to ensure a smooth transition for all employees and customers.”
Dependable CEO Ronald Massman added, “The entire Massman family is immensely proud of the legacy built by the DHE LTL team and thankful for their efforts over our many years in business. While we never intended to sell the division, we have watched with admiration as Knight-Swift set about building a leading national LTL business. When the Company approached us about a transaction, we immediately saw the strategic merit of the Dependable LTL division joining the platform. Additionally, we felt the entire Knight-Swift organization epitomized our core values of Integrity, Service and Diversity in every way. We could not have asked for a better steward of the business and look forward to watching the combined LTL business grow from here.”
Financial terms were not disclosed. The Company estimates that DHE generated approximately $122 million in total operating revenue over the past twelve months with an operating margin of approximately 10%. The DHE associates and assets will operate as a separate brand under the AAA Cooper corporate group. Joe Finney served as Chief Operating Officer of DHE prior to the transaction and will continue leading DHE as its President after the transaction. Scudder Law served as legal advisor to Knight-Swift. Houlihan Lokey served as financial advisor to Dependable, and Proskauer served as legal advisor to Dependable.
About Dependable Supply Chain Services
Prior to the transaction, Dependable’s LTL division operated within the broader integrated services offering of Dependable Supply Chain Services, an affiliated group of asset-based third-party logistics providers founded over 70 years ago by the Massman family. The LTL division serves its customers through a network of facilities located across California, Arizona and Nevada, and has developed a strong reputation for integrity, reliability and diversity. Dependable will continue to operate its full truckload, warehousing and distribution, harbor drayage and third-party logistics businesses under its existing Dependable Supply Chain Services branding.
About Knight-Swift
Knight-Swift Transportation Holdings Inc. is one of North America’s largest and most diversified freight transportation companies, providing multiple truckload transportation, less-than-truckload, logistics, and business services to the shipping and transportation sectors. Knight-Swift uses a nationwide network of business units and terminals in the United States and Mexico to serve customers throughout North America. In addition to operating the country’s largest tractor fleet, Knight-Swift also contracts with third-party equipment providers to provide a broad range of services to its customers while creating quality driving jobs for driving associates and successful business opportunities for independent contractors.