Sign up to SCR Digest, our FREE weekly newsletter, and receive our Notes emailed directly to you.
Email Address *
First Name
Mailing Lists *

Daseke (DSKE) Closes 4th Merger During 2017

By Steven Ralston, CFA


Yesterday, Daseke (NASDAQ:DSKE) announced the closing of its 4th merger of 2017. As of September 1st, The R&R Trucking Companies became part of the Daseke family of open-deck & specialized trucking companies. As a U.S. government approved carrier of arms, ammunition and explosives (AA&E), R&R adds new capabilities and further diversification to Daseke’s cargo mix. In 2016, R&R Trucking generated revenues of approximately $52 million and $6.5 million of Adjusted EBITDA.

Management reconfirmed guidance for 2017 proforma Adjusted EBITDA of $140 million, which includes the retroactive effect of acquisitions completed during 2017. 

4 Mergers Announced Since Going Public on February 27th

On May 1st, Daseke merged with two open deck transportation companies: Indiana-based The Schilli Companies and Manitoba-based Big Freight Systems Inc.  

On July1st, Daseke closed the merger with The Steelman Companies (Steelman Transportation and Group One. 

Combined, Schilli, Big Freight, The Steelman Companies and The R&R Companies generated approximately $218 million in revenues and $26 million of Adjusted EBITDA during 2016. The four companies align well with Daseke’s configuration of asset-light scalable capacity with an estimated 50% of revenues being asset-light or logistics-related.

The average purchase price for The Schilli Companies, Big Freight Systems, The Steelman Companies and The R&R Companies was 5.4 times 2016 Adjusted EBITDA. After the mergers, Daseke owns over 3,800 tractors and 8,200 trailers, along with approximately 1.2 million square feet of industrial logistics, warehousing and distribution operations. The R&R Companies added approximately 300 tractors and 900 trailers.

Daseke’s proforma 2016 revenue including the four recently merged companies is estimated to be $869 million (33.3% above reported results) while proforma Adjusted EBITDA increased to $115 million (30.3% above actual 2016 results). Management is on track to achieve its guidance of $140 million in proforma Adjusted EBITDA, especially since capital is available under a revolving line of credit ($70 million) and a delayed draw term loan ($23.7 million) in addition to the $20 million on the company’s balance sheet. 

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR and to view our disclaimer.

User ID:
Remember my ID: