John Hill Senior Managing Director hill@hydeparkcapital.com (813) 383-0205 John McDonald Senior Managing Director mcdonald@hydeparkcapital.com (813) 383-0206 Keith Hodgdon Managing Director hodgdon@hydeparkcapital.com (813) 383-0208 Transportation & Logistics M&A Report November 2016 Greg Bosl bosl@hydeparkcapital.com (813) 597-2649 Jami Gold gold@hydeparkcapital.com (813) 383-0203 Jeffrey Hendricks jhendricks@hydeparkcapital.com (678) 523-3073 Kenneth Burnside Business Development Officer burnside@hydeparkcapital.com (864) 905-9633 Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL 33602 Tel: 813-383-0202 www.hydeparkcapital.com Member FINRA/SIPC
Capital Markets Overview Commentary Select Public Offerings Transportation & Logistics During the last twelve month period ended October 31, 2016; the S&P 500 increased 1.1%, while the Transportation and Logistics Index gained 4.5%. The table on the right illustrates select public offerings recently completed in the Transportation & Logistics ( T&L ) industry. As seen in the chart to the right, companies continue to take advantage of low interest rates and issue additional debt. The Asset Light Logistics and Asset Based Logistics sectors were the industry s leaders with respect to valuation, trading at EBITDA multiples of 11.6x and 9.5x, respectively. Offer Date Issuer Industry Sector Transaction Type Transaction Value ($mm) 11/01/16 Ryder System, Inc. Logistics Fixed-Income $299 10/19/16 United Parcel Service, Inc. Logistics Fixed-Income $1,543 07/14/16 Nippon Express Co. Ltd. Trucking Fixed-Income $190 06/27/16 Kansas City Southern Railroads Fixed-Income $2,088 06/13/16 Jack Cooper Holdings Corp. Trucking Fixed-Income $375 06/06/16 TTX Company, Inc. Railroads Fixed-Income $350 05/31/16 Norfolk Southern Corp. Railroads Fixed-Income $597 Public Market Performance (LTM) Public Company Market Performance by Sector 110% 100% 4.5% 1.1% Median Change in Stock Price Enterprise Value / LTM Industry Sector 3 Months 12 months Revenue EBITDA Logistics: Asset-Light (1.0%) (0.5%) 0.7x 11.6x Logistics: Asset Based 2.7% 5.2% 1.1x 9.5x 90% Truckload 0.0% 5.1% 0.9x 6.4x Less-than-Truckload 6.1% 11.8% 0.9x 5.6x 80% Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 S&P 500 Transportation & Logistics Source: S&P Capital IQ 2
Median EV/ EBITDA Multiple Total Transaction Volume M&A Market Summary Transportation & Logistics Commentary U.S. M&A Activity Annual Trends: VOLUME As illustrated in the chart to the right, M&A activity, or deal volume, decreased 29% to 72 closed transactions during the year-to-date ( YTD ) period ended October 31, 2016, down from 102 transactions during the same prior year period. Although deal volume has fallen during 2016, the median EV/EBITDA transaction multiples increased to 9.4x YTD 2016, up from 8.1x in 2015. 160 140 120 100 80 60 119 122 128 80 88 121 144 108 110 121 102 72 The Truckload sector accounted for 36% of the deal volume completed within the T&L industry in 2016, while Asset-Based Logistics accounted for 34% and both Asset-Light Logistics and Lessthan-Truckload sectors represented 15%. 40 20 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD '15 YTD '16 U.S. M&A Activity: SECTOR BREAKDOWN (YTD 10/31/2016) U.S. M&A Activity Annual Trends: EV/ EBITDA Multiples 12.0x Median: 8.2x 15% 15% Asset-Light Logistics Asset Based Logistics 10.0x 8.0x 8.2x 8.3x 10.0x 7.3x 10.2x 7.0x 8.6x 6.7x 8.0x 8.1x 9.4x 36% 34% Truckload 6.0x 4.0x LTL 2.0x 0.0x 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD '16 Source: S&P Capital IQ Closed Transactions. 3
Profiled Transactions Transportation & Logistics Announced Date: November 4, 2016 Profiled Transaction SpartanNash (NasdaqGS:SPTN) announces acquisition of Caito Foods Service and Blue Ribbon Transport ($ in millions) Profiled Transaction Gardner Trucking, Inc. acquired by CRST International, Inc. Closed Date: September 16, 2016 ($ in millions) Target / Buyer Transaction Analysis Target / Buyer Transaction Analysis Total Transaction Size $230 Total Transaction Size Revenue Revenue EBITDA EBITDA Observations: Caito Foods Service is a distributor of fresh produce and its affiliate, Blue Ribbon Transport ("BRT") offers temperature-controlled distribution and logistic services. SpartanNash s acquisition enables it to grow its presence in the fresh produce grocery segment as Caito Foods and BRT's operations are complimentary to SpartanNash as it further strengthens its current distribution footprint and allows for cross-selling new offerings to existing customers. Profiled Transaction Observations: Gardner Trucking is a premier, California-based truckload carrier and logistic provider specializing in drayage and warehouse services. The acquisition allows CRST International, a provider of transportation and logistic services, to enhance its service offerings to its customers through Gardner s warehousing and drayage services. The acquisition is also expected to enhance operating efficiencies and fleet utilization. Profiled Transaction Span-Alaska Transportation, Inc. acquired by Matson, Inc. (NYSE:MATX) Closed Date: August 4, 2016 ($ in millions) The Apex Group acquired by Kerry Logistics Network Ltd. (SEHK:636) Closed Date: June 1, 2016 ($ in millions) Target / Buyer Transaction Analysis Target / Buyer Transaction Analysis Total Transaction Size $198 Total Transaction Size $88 Revenue Revenue EBITDA 9.4x EBITDA Observations: Span-Alaska Transportation provides LTL freight transportation and was acquired by Matson Logistics, Inc. The acquisition expands on Matson Logistics' current platform in the Pacific and allows Matson to add significant revenues by strengthening its freight forwarding business in Alaska. Additionally, the acquisition is expected to be accretive to Matson Logistics' earnings per share. Source: S&P Capital IQ Observations: The Apex Group provides ocean to air freight, customs brokerage and logistics solutions. Kerry Logistics Network, a Hong Kong based third-party logistics provider, acquired The Apex Group to further expand its international freight forwarding footprint and to achieve better cost optimization for customers of both companies. Additionally, the combined company will achieve cross-selling opportunities through a more comprehensive network post-acquisition. 4
Recent M&A Activity Transportation & Logistics Select Announced M&A Transactions Announced Date Target Target Description Buyer/Investor 11/04/16 Caito Food Service, Inc. / Blue Ribbon Transport, Inc. Enterprise Value ($mm) Operates as a food distributor. SpartanNash Co. $232.9 10/27/16 Transportation Resources, Inc. Provides truckload and less-than-truckload freight brokerage services. TransForce, Inc. $558.0 10/26/16 TTS, LLC Provides transportation and supply chain management services. Sunteck Transport Group, Inc. 10/04/16 Golden State Overnight Delivery Service Provides ground and overnight delivery services. General Logistics Systems B.V. $90.0 10/04/16 Atlantic Logistics, Inc. Offer dry van, flatbed, refrigerated, partial and less-than-truckload services. Epes Logistics Services, Inc. 09/20/16 Farren International, LLC Provides transportation and rigging services to various industries. EZE Trucking, LLC 09/19/16 Agri-Carriers Group, Inc. Provides bulk liquid transportation services to food industry. The Kenan Advantage Group, Inc. 09/13/16 C & V Trucking Co., Inc. Offers trucking and logistics services. RoadOne, Inc. 09/12/16 Gardner Trucking, Inc. Provides line haul, dedicated equipment, and logistics services. CRST International, Inc. 09/07/16 Nolan Transportation Group, Inc. Offers freight brokerage services. Ridgemont Equity Partners 09/02/16 Logistics & Distribution Services Corp. Operates as a transportation and logistics company in Nevada. ABF Logistics II, Inc. $25.0 08/30/16 ShipXpress, Inc. Provides cloud-based software solutions to assist supply chain partners. GE Transportation 08/08/16 United Express Service, Inc. Provides trucking and freight shipping services. NFI Global, LLC 08/03/16 Crown Moving Co, Inc. Comprises the business division that offers moving, relocation, and storage services. Bekins Moving & Storage Co. 08/01/16 EPIC Logistics, Inc. Operates as a third party logistics company in the United States. Epes Logistics Services, Inc. 07/26/16 Amerijet Holdings, Inc. Provides multi-modal cargo transportation and logistics services. ZS Fund L.P. 07/25/16 St. George Trucking & Warehouse, Inc. Provides ocean and air container freight station (CFS), distribution, & transportation Wind Point Partners Source: S&P Capital IQ. 5
Recent M&A Activity Transportation & Logistics Select Announced M&A Transactions Announced Date Target Target Description Buyer/Investor Enterprise Value ($mm) 07/20/16 Sterling Solutions, LLC Provides strategic and tactical improvement solutions to supply chain issues. Savills Studley, Inc. 07/18/16 Span-Alaska Transportation, Inc. Provides LTL freight transportation and freight forwarding services to and from Alaska. Matson Logistics, Inc. $197.6 07/07/16 Global Transportation Services, Inc. Provides air & ocean import/export, customs brokerage, transportation, and cargo services. American Fast Freight, Inc. 06/28/16 Buesing Bulk Transport, Inc. Provides bulk transportation services in the United States and Canada. Foodliner, Inc. 06/15/16 Mats Trucking, Inc. Provides transportation, freight, and distribution services. Moran Transportation Corp. 06/09/16 American Global Logistics, LLC Offers customized logistics solutions. Constitution Capital Partners, LLC 06/01/16 The Apex Group Provides ocean and air freight, customs brokerage, logistics, and door-to-door delivery services. Kerry Logistics Network Ltd. $172.4 05/12/16 Clancy's Transfer and Storage, Inc. Provides commercial and residential moving services. Bekins Moving & Storage Co. 04/27/16 FDSI Logistics, Inc. Provides third-party logistics and freight management services to businesses. Cardinal Health, Inc. 04/21/16 Pak Mail Centers of America, Inc. Provides packing and shipping services in the United States and internationally. Annex Brands, Inc. 03/14/16 Coastal Pacific Xpress, Inc. Provides temperature-controlled carrier services. VersaCold International 03/04/16 Blue-Grace Logistics, LLC * Provides freight shipping and transportation management services. Warburg Pincus, LLC 03/07/16 Kings Express Provides trucking and freight management services. Mobile Air Transport, Inc. 02/11/16 Advanced Distribution Services Provides cross docking facilities for logistic services. Dicom Transportation Group 02/06/16 FLS Transportation Services, Inc. Provides transportation logistics solutions for small to large companies. ABRY Partners 02/02/16 Global Distribution and Logistics LLC Provides freight transportation services. Rockfarm Supply Chain Solutions 01/12/16 EZ Alternative Transport, LLC Offers bulk liquid transportation through trucks. Heniff Transportation Systems 01/12/16 Enroute Systems Corporation Provides supply chain management and SaaS solutions. Pitney Bowes, Inc. $14.0 * Denotes Hyde Park Capital transaction Source: S&P Capital IQ. 6
Industry Sector Overview Recent Stock Price Performance Asset-Light Logistics Asset Based Logistics 110% 110% 5.2% 1.1% 100% 100% 1.1% 0.5% 90% 90% 80% Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 S&P 500 Asset-Light Based Logistics Truckload 80% Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 S&P 500 Asset Based Logistics Less-than-Truckload 110% 120% 5.1% 110% 11.8% 100% 1.1% 100% 1.1% 90% 90% 80% 80% Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 70% Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 S&P 500 Source: S&P Capital IQ. Note: See pages 8-9 for comparable groups. Truckload S&P 500 Less-than-Truckload 7
Industry Sector Overview Public Company Analysis ($ in millions, except per share) Logistics: Asset-Light Logistic Providers Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 10/31/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA Kuehne + Nagel International AG KNIN $135.67 93% $16,269 $15,714 $17,071 $6,747 $1,095 39.5% 6.4% 0.9x 14.3x CH Robinson Worldwide, Inc. CHRW $68.12 90% $9,781 $10,521 $12,940 $1,214 $919 9.4% 7.1% 0.8x 11.5x Expeditors International of Washington, Inc. EXPD $51.47 98% $9,463 $8,486 $6,052 $894 $722 14.8% 11.9% 1.4x 11.7x Panalpina World Transport Holding Ltd. SWX:PWTN $129.91 92% $3,091 $2,755 $5,476 $1,478 $145 27.0% 2.6% 0.5x 19.1x Forward Air Corp. FWRD $41.32 82% $1,264 $1,299 $974 $252 $140 25.8% 14.4% 1.3x 9.3x Hub Group, Inc. HUBG $36.45 86% $1,260 $1,241 $3,485 $451 $171 12.9% 4.9% 0.4x 7.2x Echo Global Logistics, Inc. ECHO $21.20 74% $630 $790 $1,716 $327 $52 19.0% 3.0% 0.5x 15.2x Roadrunner Transportation Systems, Inc. RRTS $7.60 31% $290 $689 $1,972 $391 $102 19.8% 5.1% 0.3x 6.8x Average 81% $5,256 $5,187 $6,211 $1,469 $418 21.0% 6.9% 0.8x 11.9x Median 88% $2,178 $2,027 $4,480 $673 $158 19.4% 5.8% 0.7x 11.6x Logistics: Asset Based Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 10/31/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA United Parcel Service, Inc. UPS $107.76 96% $96,095 $106,133 $60,029 $14,723 $10,161 24.5% 16.9% 1.8x 10.4x FedEx Corp. FDX $174.32 103% $47,894 $58,687 $52,749 $15,076 $7,742 28.6% 14.7% 1.1x 7.6x Deutsche Post AG XTRA:DPW $30.94 97% $39,224 $44,313 $66,293 $26,087 $4,540 39.4% 6.8% 0.7x 9.8x JB Hunt Transport Services, Inc. JBHT $81.61 91% $9,307 $10,245 $6,455 $1,277 $1,078 19.8% 16.7% 1.6x 9.5x DSV A/S DSV $48.39 97% $8,909 $10,211 $9,470 $2,214 $583 23.4% 6.2% 1.1x 17.5x Ryder System, Inc. R $69.39 78% $3,701 $9,145 $6,731 $1,511 $1,814 22.4% 27.0% 1.4x 5.0x XPO Logistics, Inc. XPO $32.93 80% $3,615 $9,065 $14,285 $2,083 $1,103 14.6% 7.7% 0.6x 8.2x Average 92% $29,821 $35,400 $30,859 $8,996 $3,860 24.7% 13.7% 1.2x 9.7x Median 96% $9,307 $10,245 $14,285 $2,214 $1,814 23.4% 14.7% 1.1x 9.5x Source: S&P Capital IQ. 8
Industry Sector Overview Public Company Analysis ($ in millions, except per share) Trucking Truckload Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 10/31/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA JB Hunt Transport Services, Inc. JBHT $81.61 91% $9,307 $10,259 $6,455 $1,277 $1,078 19.8% 16.7% 1.6x 9.5x Swift Transportation Co. SWFT $22.38 95% $3,081 $4,242 $4,083 $804 $548 19.7% 13.4% 1.0x 7.7x Landstar System, Inc. LSTR $71.15 98% $3,022 $2,943 $3,125 $689 $253 22.1% 8.1% 0.9x 11.6x* Knight Transportation, Inc. KNX $29.25 96% $2,374 $2,432 $1,120 $344 $264 30.7% 23.6% 2.2x 9.2x Werner Enterprises, Inc. WERN $24.05 82% $1,742 $1,873 $2,019 $536 $338 26.5% 16.7% 0.9x 5.5x Heartland Express, Inc. HTLD $18.40 84% $1,542 $1,441 $647 $242 $185 37.4% 28.5% 2.2x 7.8x Celadon Group, Inc. CGI $6.50 31% $183 $712 $1,064 $174 $97 16.4% 9.1% 0.7x 7.3x Marten Transport Ltd. MRTN $20.50 93% $673 $677 $667 $191 $131 28.7% 19.7% 1.0x 5.2x Covenant Transportation Group, Inc. CVTI $15.99 62% $292 $490 $688 $172 $113 25.1% 16.4% 0.7x 4.3x P.A.M. Transportation Services, Inc. PTSI $19.70 40% $135 $278 $427 $80 $56 18.8% 13.1% 0.7x 5.0x USA Truck, Inc. USAK $8.23 35% $75 $207 $444 $76 $38 17.1% 8.5% 0.5x 5.5x Average 73% $2,039 $2,323 $1,885 $417 $282 23.8% 15.8% 1.1x 6.7x Median 84% $1,542 $1,441 $1,064 $242 $185 22.1% 16.4% 0.9x 6.4x Less-than-Truckload Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 10/31/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA Old Dominion Freight Line, Inc. ODFL $74.68 102% $6,250 $6,453 $2,980 $900 $665 30.2% 22.3% 2.2x 9.7x Landstar System, Inc. LSTR $71.15 98% $3,022 $2,943 $3,125 $689 $253 22.1% 8.1% 0.9x 11.6x* YRC Worldwide, Inc. YRCW $8.88 45% $292 $1,060 $4,692 $505 $243 10.8% 5.2% 0.2x 4.4x Saia, Inc. SAIA $35.65 86% $911 $1,049 $1,206 $228 $153 18.9% 12.7% 0.9x 6.9x ArcBest Corp. ARCB $19.90 60% $523 $561 $2,660 $176 $132 6.6% 4.9% 0.2x 4.3x Average 78% $2,199 $2,413 $2,933 $500 $289 17.7% 10.6% 0.9x 6.3x Median 86% $911 $1,060 $2,980 $505 $243 18.9% 8.1% 0.9x 5.6x Source: S&P Capital IQ. *Excluded from the average and median calculation. 9
Hyde Park Capital Featured Transaction Warburg Pincus, LLC Makes Investment in BlueGrace Logistics, LLC Overview of the Transaction Warburg Pincus made a growth equity investment in BlueGrace Logistics, LLC. has received a growth equity investment from: Founded in 2009, BlueGrace is one of the fastest growing leaders of transportation management services in North America. As a full service third-party logistics provider (3PL), BlueGrace helps businesses manage their less-than-truckload and truckload spend through industry leading technology, high level freight carrier relationships and superior insight of the complex U.S. freight industry. BlueGrace is headquartered in Riverview, Florida. Hyde Park Capital s Role Hyde Park Capital was engaged as the exclusive investment banker and financial advisor to BlueGrace in connection with the investment in the Company. Hyde Park Capital advised BlueGrace throughout the process and negotiated and closed the transaction with Warburg Pincus, LLC. 10
Integrity Expertise Results John Hill Senior Managing Director hill@hydeparkcapital.com (813) 383-0205 Recent Transactions John McDonald Senior Managing Director mcdonald@hydeparkcapital.com (813) 383-0206 Keith Hodgdon Managing Director hodgdon@hydeparkcapital.com (813) 383-0208 has been recapitalized by & has been recapitalized by Greg Bosl bosl@hydeparkcapital.com (813) 597-2649 Jami Gold gold@hydeparkcapital.com (813) 383-0203 Jeffrey Hendricks jhendricks@hydeparkcapital.com (678) 523-3073 has been recapitalized by & has been recapitalized by Minera del Norte S.A. de C.V. Kenneth Burnside Business Development Officer burnside@hydeparkcapital.com (864) 905-9633 MTS Markets International Inc. Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL 33602 Tel: 813-383-0202 www.hydeparkcapital.com a portfolio company of Member FINRA/SIPC a part of