Interest in acquiring carriers spikes, TCP survey finds

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Transport Capital Partners recently completed its Business Expectation Survey for the second quarter of 2010, which found that almost half of carriers surveyed are translating optimism for the year ahead into interest in buying another company. ”The present surge of freight and general outlook for improved rates has spiked interest in acquisitions, rising from around mid-30 percent range by respondents in the prior five quarters to 45 percent now interested,” says Richard Mikes, TCP partner.

“Carriers across all sizes are interested in buying, but larger carriers are more interested in finding opportunities,” says Lana Batts, managing partner for TCP. Stock values for publicly traded carriers have risen over the past year, reflecting general optimism for transportation firms, though prices have dropped somewhat with the general market recently.

TCP uses the quarterly survey to collect the insights and opinions of executives nationwide in order to report on the current state of the industry and future expectations. TCP’s surveys over the last year show that carriers have become less interested in selling this quarter.

“The interest in selling has trended somewhat flat after peaking in February a year ago in the thick of dropping rates and volumes,” Mikes says. When asked in February ‘09 if they had given consideration to leaving the industry if tonnage does not increase in the next six months, more than 20 percent of all carriers said yes. Currently about 20 percent of small carriers are still replying yes to the question, while only 8 percent of the larger carriers are saying yes.

Both Batts and Mikes alluded to the survey’s high degree of interest in buying other carriers as being reflective of increased activities on the buy side at Transport Capital Partners in general and the inquiries from carriers of all types looking for strategic opportunities to capture future opportunities with in-place customers, drivers and equipment.