CHIP GRAYSON. Managing Director O: C:

Transcription

1 NOVEMBER 2017 TOM MULLINS Managing Director O: C: CHIP GRAYSON Managing Director O: C: PAUL JONES Managing Director O: C: KEVIN FIELDER Senior Vice President O: C: MATT STEMMLER Vice President O: C: Corporate Headquarters 880 Carillon Parkway St. Petersburg, FL Memphis Office 50 North Front Street, 20th Floor Memphis, TN Raymond James & Associates, Inc. member New York Stock Exchange/SIPC

2 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 EXECUTIVE FREIGHT TRENDS INSIGHT Select Transport & Logistics Stock Performance 5 Year 3 Year 1 Year 6 Months 3 Months Asset-Based Truckload 117.7% 0.6% 21.3% 29.3% 11.8% Asset-Light Transport 85.3% 29.9% 44.0% 30.7% 23.1% LTL 274.5% 31.5% 38.6% 39.6% 24.4% Railroads 93.2% 7.0% 21.7% 3.0% 6.8% Forwarding & Logistics 43.2% 16.5% 9.6% 16.5% 12.0% Integrated 82.3% 10.3% 4.2% 9.1% 2.0% S&P % 25.8% 18.2% 7.8% 6.4% 400.0% FIVE YEAR TRANSPORT & LOGISTICS STOCK INDEX 350.0% 300.0% 250.0% 200.0% 150.0% 100.0% 50.0% 0.0% Asset-Based Truckload Asset-Light Transport LTL Railroads Forwarding & Logistics Integrated S&P 500 See publicly traded freight transportation & logistics trading multiples page for companies within each industry. Past performance does not guarantee future results. There is no assurance these trends will continue. The market value of securities fluctuates and you may incur a profit or a loss. This analysis does not include transaction costs and tax considerations. If included, these costs would reduce an investor s return. The S&P 500 is an unmanaged index of 500 widely held stocks. 2

3 Publicly Traded Freight Transport Trading Multiples Share % of Market Enterprise Enterprise Value / Enterprise Value / Price / Price 52 Week Value Value EBITDA EBIT EPS Company Name 11/27/17 High ($ MM) ($ MM) 2017E 2018E 2017E 2018E 2017E 2018E Asset-Based Truckload Celadon Group Inc. $ % $209.3 $583.6 NA NA NA NA NM NM Covenant Transportation Group, Inc % x 5.8x 25.2x 15.8x 33.8x 33.8x Heartland Express, Inc % 1, , x 8.1x 24.9x 18.4x 38.2x 38.2x JB Hunt Transport Services Inc % 11, , x 10.3x 18.7x 15.6x 28.4x 28.4x Knight Transportation Inc % 7, ,939.7 NM 9.2x 36.8x 15.5x 34.8x 34.8x Marten Transport Ltd % 1, , x 6.7x 19.1x 15.8x 31.5x 26.7x P.A.M. Transportation Services, Inc % x 5.4x 30.3x 20.4x 40.4x 25.7x USA Truck Inc % x 5.9x NM 17.1x NM 26.6x Werner Enterprises Inc % 2, , x 6.4x 18.1x 14.5x 28.6x 22.8x Asset-Light Transport Forward Air Corp % 1, , x 9.9x 15.2x 13.6x 23.6x 21.5x Landstar System Inc % 4, , x 12.3x 16.5x 14.3x 26.8x 23.4x Radiant Logistics, Inc % x 7.5x 23.3x 8.8x 17.8x 14.6x Roadrunner Transportation Systems, Inc % x 6.1x 10.8x 9.2x 9.5x 10.2x Universal Logistics Holdings, Inc % x 8.0x 23.3x 13.8x 39.5x 19.8x XPO Logistics, Inc % 9, , x 8.7x 20.0x 15.2x 39.8x 26.7x LTL ArcBest Corporation % x 5.3x 16.7x 11.8x 26.8x 19.1x Old Dominion Freight Line Inc % 10, , x 11.7x 17.7x 15.6x 28.6x 25.0x Saia, Inc % 1, , x 8.0x 18.2x 14.3x 29.2x 23.1x YRC Worldwide Inc % , x 3.5x 9.8x 7.0x NM 8.6x Railroads CSX Corp % 45, , x 9.9x 15.2x 13.1x 22.9x 18.8x Canadian National Railway Company % 59, , x 11.6x 15.0x 14.2x 19.9x 18.3x Canadian Pacific Railway Limited % 25, , x 11.3x 14.6x 13.8x 19.5x 17.4x Kansas City Southern % 10, , x 10.3x 15.0x 13.8x 20.3x 17.9x Norfolk Southern Corp % 36, , x 9.7x 13.5x 12.7x 19.7x 18.0x Genesee & Wyoming Inc % 4, , x 9.6x 17.5x 15.3x 25.7x 21.2x Union Pacific Corporation % 92, , x 10.0x 13.5x 12.5x 20.2x 18.1x Forwarding and Logistics Expeditors International of Washington Inc % 10, , x 12.4x 14.3x 13.3x 25.2x 23.2x Hub Group Inc % 1, , x 9.9x 20.7x 15.0x 27.5x 21.3x Echo Global Logistics, Inc % x 12.7x 23.8x 17.8x 34.7x 25.1x CH Robinson Worldwide Inc % 11, , x 13.0x 16.2x 14.6x 24.1x 21.6x Integrated FedEx Corporation % 58, , x 7.6x 12.1x 11.2x 17.0x 15.5x United Parcel Service, Inc % 98, , x 9.9x 13.5x 12.6x 19.0x 17.6x Source: S&P Capital IQ Note: Roadrunner Transportation Systems has not released 2016 financials. Thus, 2016 numbers are still estimates. 3

4 Freight Transport Growth Estimates REVENUE GROWTH RATES BY SECTOR 60.0% 50.0% 50.6% 40.0% 30.0% 20.0% 10.0% 5.3% 12.2% 6.8% 7.1% 7.7% 4.5% 4.5% 7.7% 16.5% 5.0% 0.0% -10.0% -20.0% -9.2% TL Asset-Light LTL Rail Forwarding/3PL Integrated E-2018E EBITDA GROWTH RATES BY SECTOR 40.0% 35.0% 33.5% 30.0% 27.2% 25.0% 22.7% 20.0% 17.9% 18.4% 17.6% 18.0% 17.4% 15.0% 10.0% 5.0% 6.1% 7.0% 9.9% 5.5% 0.0% TL Asset-Light LTL Rail Forwarding/3PL Integrated E-2018E Source: S&P Capital IQ Historical growth rates reflective of revenue and EBITDA increases due to acquisitions 4

5 Historical EBITDA Multiples by Sector ASSET-BASED TRUCKLOAD ASSET-LIGHT TRANSPORT 9.0x 14.0x 8.0x 7.0x 6.0x 5.0x 7.7x 5.9x 4.8x 4.9x 6.0x 6.4x 6.9x 7.4x 6.8x 7.3x 7.8x 12.0x 10.0x 8.0x 12.2x 10.9x 9.2x 8.2x 10.4x 9.5x 7.6x 9.2x 10.6x 10.0x 11.2x 4.0x 6.0x 3.0x 2.0x 4.0x 1.0x 2.0x 0.0x 0.0x LTL RAILROADS 9.0x 8.0x 7.0x 6.0x 5.0x 4.0x 7.9x 5.5x 4.2x 6.5x 6.5x 4.8x 5.1x 6.7x 8.5x 7.2x 8.2x 14.0x 12.0x 10.0x 8.0x 6.0x 12.5x 11.0x 9.3x 8.9x 10.9x 11.1x 10.7x 10.6x 11.3x 10.9x 11.1x 3.0x 2.0x 4.0x 1.0x 2.0x 0.0x 0.0x FORWARDING & LOGISTICS INTEGRATED 16.0x 14.0x 14.0x 12.0x 10.0x 13.3x 11.0x 10.4x 10.5x 12.3x 11.3x 11.7x 13.0x 13.5x 13.4x 14.0x 12.0x 10.0x 8.0x 10.8x 8.0x 8.2x 7.6x 8.6x 8.4x 8.9x 8.2x 8.7x 8.8x 11.5x 8.0x 6.0x 6.0x 4.0x 4.0x 2.0x 2.0x 0.0x 0.0x Source: S&P Capital IQ; Multiples calculated as an average over the specified period, except current which is a snapshot in time 5

6 Select M&A Transactions in Last Six Months Date Target Closed Sector Acquiror Transaction Notes Pending 3PL Radial Bpost Pending 3PL Tosca Services Apax Partners Pending 3PL Unitrans International Quick International Courier Pending 3PL Special Logistics Dedicated LLC Pending 3PL Cloverleaf Cold Storage J.B. Hunt Transport Services, Inc. Blackstone Pending 3PL TRAC Intermodal (assets) Pending 3PL Tibbett Logistics Direct ChassisLink, Inc. Yusen Logistics 11/20/17 3PL Logical Freight Solutions 11/17/17 Trucking Westco Express MNX Global Logistics Market Express 11/16/17 3PL Fond du Lac Cold Storage Incline Equity Partners Belgian postal service bpost has reached an agreement to buy U.S. logistics business Radial, the former ebay Enterprise fulfillment operator, for $820 million. The deal is the largest ever for bpost, which has made a series of smaller acquisitions in North America, Europe and Australia aimed at expanding its e-commerce business as mail volumes decline. Radial operates 24 fulfillment centers and is forecast to generate between $970 million and $1.02 billion in revenue this year. Funds advised by Apax Partners have announced a definitive agreement to acquire Tosca Services, LLC, a leading provider of supply chain solutions and reusable packaging to the perishable markets of protein, eggs, produce and cheese. Existing shareholders will retain a minority ownership position in the company. The transaction is subject to customary closing conditions and is expected to close in Q Terms of the transaction were not disclosed. Quick International Courier, a highly specialized asset-light logistics provider of complex transport solutions for mission-critical and non-discretionary goods, has entered into a definitive agreement to purchase Unitrans International Corporation, a division of Roadrunner Transportation Systems. Founded in 1977 and headquartered in Los Angeles, California, Unitrans is a full service international freight forwarder with significant cold chain capabilities. J.B. Hunt has agreed to buy Special Logistics Dedicated ("SLD") for $136 million. The acquisition will expand J.B. Hunt's e-commerce delivery platform. SLD provides pool distribution services throughout North America using 14 terminals and fulfillment centers and a fleet of more than 850 pieces of equipment. Services include dedicated transportation at both dedicated and multi-use sites; cross-docking and contract logistics; less-than-truckload product consolidation; commingled pool distribution; and a Texas-based intrastate 57' dry van highway service. Cloverleaf Cold Storage, a leading cold storage warehousing and food logistics company owned by the Feiges and Kaplan families since its founding in 1952, announced that it has entered into a definitive agreement to recapitalize the Company whereby private equity funds affiliated with Blackstone will make a majority equity investment into Cloverleaf alongside the existing family shareholders, who will continue to operate the business post-closing, to support future growth in the Company. Terms of the transaction were not disclosed. Direct ChassisLink, Inc. has signed a definitive agreement to acquire TRAC Intermodal s fleet of approximately 72, foot domestic chassis and related customer and hosting contracts with major Class I railroads and intermodal shipping companies throughout the United States. The transaction is expected to close in January 2018, subject to customary closing conditions. Financial terms of the transaction were not disclosed. Yusen Logistics has reached agreement to acquire Tibbett Logistics, a wholly owned subsidiary of UK-based Keswick Enterprises Group. This acquisition is subject to regulatory approval by the Romanian authorities. Tibbett Logistics was established in Romania in 2010, although the business can trace its beginnings back to The company has since developed into a domestic market leader within the contract logistics, warehousing, transport and intermodal sectors. MNX Global Logistics has acquired international logistics solutions provider Logical Freight Solutions. Founded in 1994 in Melbourne, Australia, Logical Freight Solutions serves the healthcare industry, including life science, ag-bio, diagnostics, therapeutics, proteomics, medical devices, microbiology, genomics, chemicals, radiopharmaceuticals, instruments, spare parts and all consumables for these industries. Entrepreneur Peter Stott s trucking firm Market Express purchased Westco Express in a deal combining two regional carriers. Trucking veteran Stott launched Portland, Ore.- based Market Express in the summer of It runs 95 trucks 65 company-owned and 30 with owner-operators and 150 trailers and projects more than $20 million in revenues this year. Denver-based Westco operates 60 trucks and 200 trailers in eight Great Plains and Western states. Incline Equity Partners, a Pittsburgh-based lower middle-market private equity firm, has partnered with Fond du Lac Cold Storage, a leading provider of local refrigerated logistics and storage. Fond du Lac provides fully refrigerated storage to its customers, specializing in wine, cheese and chocolate. Founded in 1998, the Company offers storage and daily delivery services to markets in New Jersey, Illinois and New York, and other value-added services such as labeling and picking and repacking. 6

7 Select M&A Transactions in Last Six Months Date Target Closed Sector Acquiror Transaction Notes 11/14/17 3PL REI Logistics Korten Quality Systems Day & Ross Transportation Group 11/08/17 3PL Supreme Shuttle Services SuperShuttle 11/07/17 3PL Transitainer Global (US business) OL International 11/01/17 3PL Savage Logistics Becker Logistics 11/01/17 Trucking Indiana Transport, Inc. Patrick Industries, Inc. 10/12/17 3PL Odyssey Logistics & Technology Corporation 10/09/17 3PL Transplace The Jordan Company TPG Capital As a key part of its strategic growth plan, Day & Ross Transportation Group has acquired of REI Logistics and Korten Quality Systems, Ltd. in Romeo, Michigan. These two businesses will operate as Day & Ross Dedicated Logistics USA, a division of Day & Ross USA Inc. under the leadership of Shawn McMahon, President Day & Ross Dedicated Logistics. SuperShuttle, the nation's largest airport ride sharing service, has acquired Supreme Shuttle of Washington Dulles International Airport and Washington Reagan International Airport. Effective immediately, this merger will result in improved service levels by offering airport passengers additional booking options and a larger fleet capacity. OL International has acquired the USA office of Transitainer Global based in Long Beach, California. Transitainer, a specialist in the shipment of air and ocean freight to Australia, has been a recognized leader in the trade since Transitainer brings significant experience and capability to the OL International portfolio of logistics services within the South Pacific and Australian markets. Becker Logistics LLC, has acquired the freight brokerage business of Savage Companies. With offices in Chicago, IL, Duluth, GA, and Eugene, OR, Savage Logistics LLC provides third-party logistics services that connect shippers with truck transportation providers across the United States and Canada. These services will now be provided under the Becker Logistics name. Patrick Industries, Inc. has completed the acquisition of the business and certain assets of Elkhart, Indiana-based Indiana Transport, Inc., a leading transportation and logistics service provider primarily to original equipment manufacturers and dealers in the recreational vehicle market. The Company projects Indiana Transport's full-year 2017 revenues to be approximately $100 million and expects the acquisition to be immediately accretive to 2017 net income per share. Odyssey Logistics & Technology Corporation, a leading global logistics provider, has been acquired by The Jordan Company. The transaction is expected to close in the third quarter, subject to customary closing conditions, and will result in the buyout of all shares currently held by the venture capital firms who initially invested to help launch the company. There will be no change in Odyssey s management, core strategy or mission. TPG Capital has acquired Transplace, the leading provider of transportation management and other third-party logistics services. TPG is partnering with company management to purchase Transplace from Greenbriar Equity Group. 10/09/17 3PL Summitline Industries TMC Workforce Solutions 10/08/17 3PL ITS ConGlobal AMP Capital 10/05/17 Trucking Falcon Transport CounterPoint Capital Partners 10/03/17 Trucking Bell Enterprises (Tanker Business) G&D Integrated TMC Workforce Solutions, a national staffing and recruiting firm based in Houston, announced it has acquired Summitline Industries in Fort Wayne, Ind., as part of an effort to expand its supply chain support business. Summitline, established in 1983, offers procurement, warehousing and distribution, order fulfillment and domestic and international shipping services. The company will adopt the name TMC Supply Chain Solutions, but key members of management will remain in place. Australia s AMP Capital has bought U.S. logistics group ITS ConGlobal from Carlyle Infrastructure Partners, marking the Australian fund manager s largest-ever North American deal.amp did not provide a deal value in its statement on Monday, but a source familiar with the transaction told Reuters the acquisition was worth more than $500 million. The price for ITS ConGlobal was about 10.5 times the EBITDA of the freight, terminal and transport firm, said the source, who was not authorized to speak publicly about the matter. CounterPoint Capital Partners has acquired Falcon Transport, a provider of freight hauling services for U.S. steel mills and auto makers. Falcon also hauls general commodities for Fortune 500 companies. Founded in 1903, Falcon is based in Youngstown, Ohio. G&D Integrated has acquired the tanker business of Bell Enterprises, Inc., a privately owned agricultural firm which specializes in grain handling and transportation. The purchase of this operation from Bell Enterprises, based in Deer Creek, Illinois, gives G&D Integrated an opportunity to enter the tanker transportation market. 7

8 Select M&A Transactions in Last Six Months Date Target Closed Sector Acquiror Transaction Notes 10/03/17 3PL IntegraCore 10/02/17 3PL AIT Worldwide Logistics 10/02/17 3PL Newgistics Visible Supply Chain Management Quad-C Management Pitney Bowes 10/02/17 3PL California Cartage Company NFI Industries 10/02/17 Marine Enviva Port of Wilmington, LLC Enviva Partners, LP Visible Supply Chain Management has acquired Utah- and Georgia-based IntegraCore, provider of business-to-consumer order fulfillment and shipping services. IntegraCore s reach and knowledge will be incorporated into VSCM s complete vertical integration system, including unmatched parcel service, personalized fulfillment solutions, expert logistics strategies and custom packaging options. Quad-C Management, Inc., a leading middle market private equity firm, has formed a financial partnership with AIT Worldwide Logistics, a global leader in air and sea freight, ground distribution, warehouse management and custom supply chain solutions. Terms of the transaction were not disclosed. Quad-C is partnering with AIT's executive management team, who are maintaining significant ownership. Pitney Bowes has acquired Newgistics, Inc., an Austin, Texas-based provider of parcel delivery, returns, fulfillment and digital commerce solutions for retailers and ecommerce brands. The acquisition is designed to accelerate Pitney Bowes expansion into the U.S. domestic parcels market at scale, enabling the company to deliver a broader range of consumer-focused ecommerce and parcel management solutions. NFI Industries has acquired California Cartage and all of its affiliated companies. With the purchase, NFI strengthens its foothold into the port drayage and transloading market in California and other major markets, including Seattle, Savannah, Ga., Charleston, S.C., Norfolk, Va. and Houston. The deal also gives NFI access to expertise that can be used to automate processes in the company s warehouses to provide e-commerce fulfillment services for major retailers Enviva Partners has purchased Enviva Port of Wilmington, LLC, for a total consideration of $130 million. Wilmington owns a fully operational deep-water marine terminal in Wilmington, North Carolina. 10/01/17 Trucking Rackleff Enterprises Stella Environmental Holdings 09/29/17 3PL Parcel Inc. Walmart 09/29/17 3PL Cool Chain Group Panalpina 09/18/17 Trucking Celadon Group, Inc. (Flatbed Division) PS Logistics, LLC 09/15/17 3PL All My Sons Moving and Storage Sterling Investment Partners 09/08/17 Trucking Swift Transportation Co. Knight Transportation, Inc. 09/07/17 Trucking Haney Truck Line Wilson Logistics Stella Environmental Holdings, a Hidden Harbor Capital Partners portfolio company that provides transfer station management and municipal waste logistics services, today announced the purchase of Rackleff Enterprises, expanding its geographic footprint, diversifying its customer base, and strengthening its existing facility management, hauling, and loading capabilities. Walmart has acquired Parcel, a technology-based, same-day and last-mile delivery company that specializes in perishable and non-perishable delivery to customers in New York City. Parcel uses routing algorithms, a fleet of leased vehicles, and a professional, employee-based workforce, to quickly sort, load and deliver packages to customers. Panalpina has acquired Cool Chain Group to expand its perishables network into Germany. The acquisition also includes the Cool Chain Group team that is specialized in international air freight and the import of perishables. The deal will further strengthen the Panalpina Perishables Network in Europe and the company's global end-to-end offering for fresh produce. Celadon Group Inc. is getting out of the flatbed business, striking a deal under which PS Logistics in Birmingham, Ala., will buy all of its flatbed equipment, retain its drivers and staff, and take over contracts with certain customers. Flatbed/heavy specialized hauling generated only about $20 million in revenue for Celadon in 2016 and was the smallest of five freight sectors in which the company competes. Sterling Investment Partners has acquired All My Sons Moving and Storage, the largest national non-franchise provider of local residential moving services in the United States, operating 63 locations across 28 states. All My Sons performs approximately 120,000 moves annually. Its business model is built around an industry-leading technology platform. Knight Transportation has agreed to acquire Swift Transportation from the Jerry Moyes family, via a plan of merger. The transaction is expected to generate synergies from improving yield, identifying purchasing economies, benefitting from broader geographic scale and reduced interest costs due to enhanced cash flow. The transaction is expected to be completed in the third quarter of Wilson Logistics Inc., based in Springfield, Mo., has purchased the assets of Haney Truck Line, adding flatbed and heavy-specialized freight hauling to its portfolio of trucking and logistics services while significantly expanding business in the Pacific Northwest and parts of Canada. 8

9 Select M&A Transactions in Last Six Months Date Target Closed Sector Acquiror Transaction Notes 09/05/17 3PL United Road Services The Carlyle Group 09/05/17 Trucking R&R Trucking, Inc. Daseke, Inc. The Carlyle Group has acquired United Road Services from Charlesbank Capital Partners, LLC. Headquartered in Romulus, Michigan, United Road is a prominent provider of vehicle transport and logistics in North America. United Road serves 10,000- plus diverse customers including manufacturers, retailers, finance and leasing companies, rental agencies, auctions, web-based logistics firms and individuals transporting millions of new, remarketed and specialty vehicles annually. Daseke Inc., a leading consolidator and the largest owner of flatbed and specialized transportation solutions in North America, announced a merger with R&R Trucking, a leading specialized transporter of defense and commercial AA&E (arms, ammunition and explosives) cargo. This marks Daseke s fourth company addition since May 1, /31/17 3PL Milgram & Co. C.H. Robinson Worldwide 08/28/17 3PL United Global Logistics RoadOne IntermodaLogistics 08/01/17 3PL National Fulfillment Services Metro Supply Chain Group 07/19/17 3PL Keg Logistics Seaport Capital, LLC 07/18/17 3PL Commodity Forwarders Inc. Kuehne + Nagel International 07/14/17 Trucking Old Dominion Truck Leasing Penske Truck Leasing Co. 7/72017 Railroad Florida East Coast Railway Holdings Corp. Grupo Mexico SAB 07/06/17 Trucking Interstate Distributor Co. Heartland Express Inc. 07/05/17 Trucking The Steelman Companies Daseke, Inc. C.H. Robinson expanded its global presence with its acquisition of Milgram & Company Ltd., a world-class provider of freight forwarding, customs brokerage, and surface transportation in Canada. Milgram is a leading provider of customs brokerage and freight forwarding, in addition to providing surface transportation and warehousing services. Headquartered in Montreal, Quebec, Milgram employs approximately 330 employees and has six offices in Canada and one office in the United States. RoadOne IntermodaLogistics has acquired United Global Logistics, which gives the drayage provider a new presence in the Midwest market, including Chicago. RoadOne is based in Randolph, Mass., and offers port and rail container drayage, terminal operations, dedicated truckload services, and transloading, warehousing and distribution solutions. Metro Supply Chain Group has acquired National Fulfillment Services Inc. ( NFS ). Headquartered in Aston, Pennsylvania, NFS is a privately-owned company with a more than fifty year tenure in direct-to-consumer fulfillment. Metro s Group President, Martin Graham, sees this as an important step in the build-out of the company s e-commerce (B2C) services which operate under the E24 brand. Bregal Seamount has sold its stake in Keg Logistics to Seaport Capital in a deal between middle-market private equity firms. Keg Logistics provides management and logistics services to brewery clients and distributors, managing domestic and international logistics, 3PL support and equipment financing to more than 1,000 breweries and wineries globally. Kuehne + Nagel has expanded its global perishables network with the acquisition of Commodity Forwarders, an air freight forwarder of perishables products in the United States. Commodity Forwarders was established in 1974 by Alfred Kuehlewind as a one-man office in Los Angeles shipping strawberries to Europe, and now operates 14 locations throughout the U.S. with more than 700 employees. Penske Truck Leasing has acquired Richmond, Virginia-based Old Dominion Truck Leasing. Financial terms were not disclosed. Old Dominion Truck Leasing serves approximately 360 customers in diverse industry sectors from 11 locations in five states. Old Dominion Truck Leasing's products and services align well with Penske's existing service offering that includes full-service truck leasing, truck rental, contract fleet maintenance, and dedicated contract carriage. Mexican mining and railroad company Grupo Mexico SAB has acquired Florida East Coast Railway Holdings Corp. in a $2.1 billion deal, expanding its transport operations in the U.S. with the acquisition of the 351-mile railway. Heartland Express Inc. has purchased Interstate Distributor Co. from owner Saltchuk Resources Inc. in a $113 million deal. Interstate Distributor's truckload business generated about $325 million in total revenue in 2016, according to Heartland. Its fleet consists of 75% dry van and 25% refrigerated trucks. Daseke has acquired The Steelman Companies. Operating throughout the Midwest, Steelman is a specialized transportation company with two distinct areas of expertise in its operating companies. Steelman Transportation carries flatbed and heavy haul freight while Group One specializes in transporting roll-on powersports, industrial warehousing as well as offering 10-wheel drive-away services. 9

10 Select M&A Transactions in Last Six Months Date Target Closed Sector Acquiror Transaction Notes 07/01/17 Trucking Estenson Logistics, LLC Hub Group, Inc. Hub Group Trucking, a Hub Group subsidiary, has acquired Estenson Logistics, LLC for approximately $306 million. The business will be named Hub Group Dedicated Services and will operate as part of Hub Group Trucking. 6/31/2017 3PL Nighline Logistics Group United Parcel Service, Inc. 06/15/17 3PL Partner Logistics Lineage Logistics 06/02/17 3PL Dedicated Logistics Technologies Radiant Logistics 05/31/17 Railroad Atlantic Western Transportation Genesee & Wyoming UPS has acquired Nightline Logistics Group, one of the leading express delivery and logistics companies in Ireland. UPS continues to create new market growth opportunities, and this acquisition will immediately position UPS as one of the top local shippers in Ireland. Terms of the acquisition were not disclosed. Lineage Logistics has acquired Partner Logistics ( Partner ), Europe s leading cold storage provider and the world s largest automated cold storage company. The transaction marks the first international acquisition by Lineage, an organization backed by investment firm Bay Grove, LLC, and represents significant growth in the company s warehouse automation strategy. Financial terms of the deal were not disclosed. Radiant Logistics Inc. has acquired Dedicated Logistics Technologies, a privately held company with operations in Newark, N.J., and Los Angeles. A purchase price was not disclosed, but after Dedicated Logistics is integrated into Radiant s current business, the combination is expected to generated about $28 million in annual revenue in the two cities. Ken Fry, who ran Dedicated Logistics, will run the operations under the Service By Air brand. Alan Brown and David Argen also will continue in leadership roles in the combined organization. U.S.-based railroad holding company Genesee & Wyoming (G&W) has acquired Heart of Georgia Railroad's (HoG) parent company, Atlantic Western Transportation. After completion of the acquisition, HoG will be managed as one of G&W's Coastal Region railroads. Founded in 1999, HoG operates across 219 miles of track leased from the Georgia Department of Transportation. 10

11 Key Trucking Metrics FLATBED SPOT RATES DRY VAN SPOT RATES $1.95 $1.75 $1.85 $1.65 $1.75 $1.65 $1.55 $1.55 $1.45 $1.35 $1.25 $1.45 $1.15 $1.35 $1.05 Source: DAT RateView Source: DAT RateView CASS FREIGHT SHIPMENTS INDEX DIESEL PRICES 1.25 $ $ $ $ $ $ $1.50 Source: Cass Information Systems Source: EIA National Average ATA TRUCK TONNAGE Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Source: American Trucking Association Adjusted Truck Tonnage Index YOY Change 30% 20% 10% 0% -10% -20% -30% 11

12 Rail Volume Trends U.S. RAIL TRAFFIC (1) Week 46, 2017 Year-To-Date Source: AAR (1) Excludes U.S. operations of CN and Canadian Pacific Cars vs 2016 Cumulative vs 2016 Total Carloads 266, % 11,969, % Chemicals 31, % 1,424, % Coal 86, % 3,918, % Farm and Food Products, Excluding Grain 16, % 735, % Forest Products 10, % 461, % Grain 21, % 1,021, % Metallic Ores and Metals 23, % 1,042, % Motor Vehicles and Parts 18, % 770, % Nonmetallic Minerals and Products 38, % 1,711, % Petroleum and Petroleum Products 10, % 437, % Other 9, % 445, % Intermodal Units 287, % 12,420, % Total Traffic 554, % 24,389, % 330,000 RAILCAR CARLOADS (1) 310, , , , , , , Source: AAR (1) Excludes intermodal units 35,000 CHEMICALS 300,000 INTERMODAL (CONTAINERS & TRAILERS) 33,000 31, , , ,000 29, ,000 27,000 25, , , ,000 23, , Source: AAR Source: AAR 12

13 TEUs (in thousands) TEUs (in thousands) TEUs (in thousands) TEUs (in thousands) EXECUTIVE FREIGHT TRENDS INSIGHT Ocean Shipping Rates & Large U.S. Port Volume Trends $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 CONTAINER RATE BENCHMARK (HONG KONG TO LOS ANGELES) Source: Drewry, JOC PORTS OF LOS ANGELES AND LONG BEACH PORTS OF NEW YORK AND NEW JERSEY 1,600 1, , ,300 1, ,100 1, Source: Port of Los Angeles & Long Beach Source: Port of New York & New Jersey PORT OF SAVANNAH PORT OF CHARLESTON Source: Port of Savannah Source: Port of Charleston 13

14 Transport & Infrastructure Investment Banking Raymond James Overview Investment Banking Equity Capital Markets Equity Research Full-service financial services firm with investment banking, equity research, institutional sales & trading and asset management operations Founded in 1962 and public since 1983 (NYSE: RJF) Fiscal 2016 revenue of nearly $5.4 billion International operations in Brussels, Buenos Aires, Calgary, Düsseldorf, Geneva, London, Munich, Paris, Toronto and Vancouver Over 300 investment banking professionals across 19 office locations focused on 11 industry sectors Since 2011, we have participated in raising more than $450 billion in capital and completed more than 400 advisory assignments, including nearly 350 M&A buy-side or sell-side advisory assignments Powerful institutional and retail distribution capabilities More than 6,700 financial advisors serving in excess of 2.8 million client accounts in the U.S. 300 experienced institutional salespersons servicing more than 2,400 institutional accounts One of Wall Street s leading research efforts with 84 fundamental and technical research analysts covering more than 1,000 U.S. and more than 300 international companies TRANSPORT PRACTICE CREDENTIALS 13 dedicated professionals led by senior bankers with a 18-year average tenure with the company Completed over 160 M&A and financing transactions: 90+ advisory services transactions, leading all sector-focused investment banks 70+ equity and debt offerings raising over $14.0 billion in proceeds Extensive experience and industry knowledge with deep senior executive and private equity relationships TRANSPORT & INFRASTRUCTURE SECTOR EXPERTISE WAREHOUSING & DISTRIBUTION Import Value-Added Deconsolidation Services Multi-Vendor Pool Distribution Consolidation Kitting and Sub- Fulfillment Assembly TRUCKING Truckload Dry Van LTL Temperature- Intermodal Controlled Expedited Bulk Dedicated Contract Tank Carriage Flatbed LOGISTICS / SUPPLY CHAIN Reverse Logistics Transportation Management Last-Mile Air Freight Forwarding Ocean Freight Forwarding AIRLINES & AVIATION Air Cargo Passenger Transportation Customs Clearance Freight Brokerage Intermodal Marketing Compliance Global Trade Management RAIL & RAIL SUPPLIERS Short-line Railroads Maintenance and Repair Railcar Manufacturers Outsourced Services Equipment and Infrastructure INFRASTRUCTURE & OTHER Port Services Equipment Leasing Marine / Terminals Outsourced Component Services Manufacturing Solid Waste Mobile Asset Hauling Management Specialized TRANSPORT & INFRASTRUCTURE EQUITY RESEARCH Tyler Brown, Transportation and Logistics Analyst 10+ years covering logistics, trucking, leasing, and rail companies Recognized by StarMine Top Analyst survey for his coverage of the transportation services sector Savanthi Syth, Airlines Analyst 6+ years of experience covering the airline industry Raymond James has longstanding recognition of being a leader in aviation equity research 14

15 Transport & Infrastructure Investment Banking * 2016 INVESTMENT BANK OF THE YEAR 2016 INVESTMENT BANKING FIRM OF THE YEAR 2015 M&A INVESTMENT BANK OF THE YEAR USA RECEIVED THOMSON REUTERS ANALYST AWARDS SALE OF SEKO TO GREENBRIAR EQUITY B-to-B DEAL OF THE YEAR REPRESENTATIVE M&A ADVISORY EXPERIENCE September 2017 August 2017 May 2017 September 2016 August 2016 August 2016 February 2016 a portfolio company of has been acquired by AN UNDISCLOSED BUYER An affiliate of Has acquired Has received an equity investment from Has acquired October 2015 October 2015 July 2015 June 2015 April 2015 February 2015 February 2015 Has acquired Has acquired Has beenacquiredby Has received an equity investment from Has received a majority investment from October 2014 September 2014 February 2014 February 2014 November 2013 October 2013 December 2012 Has acquired Has divested its freight brokerage division to Has merged with REPRESENTATIVE CAPITAL RAISING EXPERIENCE October 2017 September 2017 July 2017 July 2017 July 2017 May 2017 April 2017 Completed an out-of-court restructuring led by In conjunction with a new $80 million ABL facility led by $362,300,000 Follow-On Offering Bookrunning Manager Has received an ABL facility from $292,000,000 $75,000,000 Start-Up Capital Commitments $665,500,000 Follow-on Offering Co-Manager Has received a preferred stock investment from $540,500,000 $570,000,000 Initial Public Offering Bookrunning Manager December 2016 September 2016 October 2015 October 2015 June 2015 May 2015 May 2015 Has received an investment led by Has received an investment led by $300,000,000 Follow-on Offering Co-Manager $30,000,000 $1,600,000,000 Term Loan B Co-Manager $1,600,000,000 Senior Notes Co-Manager $80,500,000 Follow-On Offering Sole Manager $340,000,000 Initial Public Offering Co-Manager RJTRANSPORTANDINFRASTRUCTURE.COM This report includes logos or other words or devices that may be registered trademarks of their respective owners. Such use is solely for purposes of convenience in referring to the trademark owners and their products/services. This report and its contents are not endorsed, sponsored or affiliated with any trademark owner. Raymond James & Associates, Inc. and its affiliates are not affiliated with any trademark owner but may provide certain financial services to one or more trademark owners or their affiliates. 15