FORT SMITH, Ark., Sept. 29, 2021 /PRNewswire/
-- ArcBest® (Nasdaq: ARCB), a leader in supply
chain logistics, today announced that it has entered into a
definitive agreement to acquire MoLo Solutions, LLC ("MoLo"), a
Chicago-based truckload freight
brokerage. With the acquisition, ArcBest will become a top 15 U.S.
truckload broker with access to over 70,000 carrier partners.
Founded in 2017, MoLo has outpaced industry benchmarks by
rapidly growing its customer base and revenue – recently ranking #1
in the Transportation & Logistics industry on the "2021 Inc.
5000 Fastest-Growing Private Companies in America". MoLo revenue in
2020 equaled $274 million, an
increase of more than 100% over the previous year, and MoLo expects
revenue of approximately $600
million in 2021.
Strategic highlights of ArcBest's acquisition of MoLo are
expected to include:
- Acceleration of Asset-Light business growth by
improving ArcBest's ability to serve larger customers and expanding
access to truckload capacity partners.
- Expansion of ArcBest's revenue opportunities through
increased cross-selling potential, better ability to secure new
customers and a strong presence in the logistics innovation hub of
Chicago.
- Enhancement of shareholder value, including
revenue and earnings growth and improved prospects for superior
financial returns, through leveraging economies of scale and
operational efficiency synergies. Expected to deliver accretion of
EPS before acquisition-related amortization in the first full year
of operations.
- Strengthening a shared culture of customer
obsession that has driven growth and compelling performance for
both companies.
"We are pleased to add MoLo's significant capabilities and
talent to our truckload brokerage offering, allowing us to better
meet the critical needs of our customers, deliver comprehensive
supply chain solutions and accelerate our company's continued
growth," said Judy R. McReynolds,
ArcBest chairman, president and CEO. "Since its founding four years
ago, MoLo has built a strong foundation and reputation for
excellence based on trusted customer and carrier relationships, as
well as a proven ability to offer unsurpassed service. Since we
began discussing a possible transaction several months ago, it
became clear what a great fit MoLo was with ArcBest."
McReynolds added, "ArcBest's timely investment further
accelerates growth by increasing the scale of our asset-light
business, and MoLo's proven ability to cultivate significant
shipment growth with large shippers will be highly complementary
and synergistic. This acquisition capitalizes on our terrific
business momentum and positions us to enhance value for all of our
stakeholders, including our customers, employees, communities and
ArcBest shareholders."
ArcBest president of Asset-Light Logistics and chief yield
officer, Danny Loe, said, "There is
tremendous market opportunity in the truckload brokerage business,
and we are pleased with continued growth and progress in that area.
Our relationships are built on trust. Providing a seamless and
significantly enhanced truckload brokerage offering will strengthen
and grow our customer relationships. We're excited to have
Andrew Silver, an experienced
Chicago-based leader, overseeing
that offering for ArcBest."
Andrew Silver, CEO of MoLo, said,
"We have spent the last four years building a great organization,
with a vision to create the best experience in the industry for our
employees, drivers, and shipper partners. We believe this
partnership with ArcBest further advances the opportunity we have
to achieve our vision. MoLo has been able to reach $600 million in annual revenues with only 500
shippers; in doing this deal, we can now tap into ArcBest's 30,000
existing shippers and offer them the same level of service we've
been providing our existing customers. In addition to that, we can
now offer our customers a breadth of services we couldn't before,
including owned assets, increased drop trailer capabilities, LTL,
expedited, outsourced transportation management, and more. I am
incredibly thankful that ArcBest sees the same potential in our
people that we do. Together, we are going to accomplish great
things."
Terms of the Transaction
Terms of the transaction
include a cash payment at closing of $235
million from available funds, subject to post-closing
adjustments, and the potential for additional cash consideration
based on achievement of Adjusted EBITDA targets for years 2023
through 2025 as outlined in Exhibit 99.2 of the Form 8-K filed on
September 29, 2021. The acquisition
is expected to close in the fourth quarter of 2021, subject to
customary conditions and expiration of the applicable waiting
period pursuant to the Hart Scott Rodino Antitrust Improvements Act
of 1976.
Advisors
Stephens Inc. acted as financial advisor to
ArcBest for the transaction while J.P. Morgan Securities LLC acted
as financial advisor for MoLo. Vinson & Elkins acted as legal
advisor to ArcBest. Eversheds Sutherland acted as legal advisor
to MoLo.
Conference Call
ArcBest will host a conference call
with company executives to discuss the details of the transaction.
The call will be today, Wednesday, September
29, at 5:00 p.m. EDT
(4:00 p.m. CDT). Interested parties
are invited to listen by calling (800) 931-6428 or by joining the
webcast which can be found on ArcBest's website at arcb.com. Slides
to accompany this call are included in Exhibit 99.2 of the Form 8-K
filed on September 29, 2021, will be
posted and available to download on the company's website prior to
the scheduled conference time, and will be included in the webcast.
Following the call, a recorded playback will be available through
the end of the day on November 1,
2021. To listen to the playback, dial (800) 633-8284 or
(402) 977-9140 (for international callers). The conference call ID
for the playback is 21998087. The conference call and playback can
also be accessed, through November 1,
2021, on ArcBest's website at arcb.com.
About ArcBest
ArcBest® (Nasdaq: ARCB) is a
multibillion-dollar integrated logistics company that helps keep
the global supply chain moving. Founded in 1923 and now with 14,000
employees across more than 250 campuses and service centers, the
company is a logistics powerhouse, fueled by the simple notion of
finding a way to get the job done. Through innovative thinking,
agility and trust, ArcBest leverages their full suite of shipping
and logistics solutions to meet customers' critical needs, each and
every day. For more information, visit arcb.com.
About MoLo
MoLo is a third-party logistics company
with a mission to deliver the best experience in transportation. At
MoLo, we're driven to do things the right way. For us, that starts
by creating a better environment for logistics professionals, which
allows us to provide a better experience for drivers and carriers
in our network and offer better service to our customer partners.
MoLo's commitment to our core values impacts everything we do, from
caring for our customers to coordinating the carriers who move our
freight.
The following is a "safe harbor" statement
under the Private Securities Litigation Reform Act of 1995:
Certain statements and information contained in this press release
that are not based on historical facts may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Terms such as
"anticipate," "believe," "could," "estimate," "expect," "forecast,"
"foresee," "int end," "may," "plan," "predict," "project,"
"scheduled," "should," "would," and similar expressions and the
negatives of such terms are intended to identify forward-looking
statements. These statements are based on management's beliefs,
assumptions, and expectations based on currently available
information, are not guarantees of future performance, and involve
certain risks and uncertainties (some of which are beyond our
control). Although we believe that the expectations reflected in
these forward-looking statements are reasonable as and when made,
we cannot provide assurance that our expectations will prove to be
correct. Actual outcomes and results could materially differ from
what is expressed, implied, or forecasted in these statements due
to a number of factors, including, but not limited to: widespread
outbreak of an illness or disease, including the COVID-19 pandemic
and its effects, or any other public health crisis, as well as
regulatory measures implemented in response to such events;
external events which may adversely affect us or the third parties
who provide services for us, for which our business continuity
plans may not adequately prepare us; a failure of our information
systems, including disruptions or failures of services essential to
our operations or upon which our information technology platforms
rely, data breach, and/or cybersecurity incidents; interruption or
failure of third-party software or information technology systems
or licenses; untimely or ineffective development and implementation
of, or failure to realize potential benefits associated with, new
or enhanced technology or processes, including the pilot test
program at ABF Freight; the loss or reduction of business from
large customers; the ability to manage our cost structure, and the
timing and performance of growth initiatives; inability to close
the contemplated MoLo acquisition in the anticipated timeframe or
at all; the cost, integration, and performance of any recent or
future acquisitions, including the MoLo acquisition, and the
inability to realize the anticipated benefits of the acquisition
within the expected time period or at all; the timing or amount of
the earnout payments for the MoLo acquisition, if any; maintaining
our corporate reputation and intellectual property rights;
competitive initiatives and pricing pressures; increased prices for
and decreased availability of new revenue equipment, decreases in
value of used revenue equipment, and higher costs of
equipment-related operating expenses such as maintenance, fuel, and
related taxes; availability of fuel, the effect of volatility in
fuel prices and the associated changes in fuel surcharges on
securing increases in base freight rates, and the inability to
collect fuel surcharges; relationships with employees, including
unions, and our ability to attract, retain, and develop employees;
unfavorable terms of, or the inability to reach agreement on,
future collective bargaining agreements or a workforce stoppage by
our employees covered under ABF Freight's collective bargaining
agreement; union employee wages and benefits, including changes in
required contributions to multiemployer plans; availability and
cost of reliable third-party services; our ability to secure
independent owner operators and/or operational or regulatory issues
related to our use of their services; litigation or claims asserted
against us; governmental regulations; environmental laws and
regulations, including emissions-control regulations; default on
covenants of financing arrangements and the availability and terms
of future financing arrangements; self-insurance claims and
insurance premium costs; potential impairment of goodwill and
intangible assets; general economic conditions and related shifts
in market demand that impact the performance and needs of
industries we serve and/or limit our customers' access to adequate
financial resources; seasonal fluctuations and adverse weather
conditions; and other financial, operational, and legal risks
and uncertainties detailed from time to time in ArcBest
Corporation's public filings with the Securities and Exchange
Commission (the "SEC").
For additional information regarding known material factors that
could cause our actual results to differ from our projected
results, please see our filings with the SEC, including our Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current
Reports on Form 8-K.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof.
We undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events, or otherwise.
Investor Relations Contact: David
Humphrey
Title: Vice President – Investor Relations
Phone: 479-785-6200
Email: dhumphrey@arcb.com
Media Contact: Autumnn Mahar
Title: Senior Manager, PR and Social
Phone: 479-494-8221
Email: amahar@arcb.com
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SOURCE ArcBest