Shares of Heartland Express (HTLD1) jumped up on Tuesday following the news that the company acquired privately held Gordon Trucking, putting the company on track to generate a billion in revenues per year.
While the deal is great, in terms of valuation multiples and large expected synergies, the jump in the share price and high pre-deal valuation makes an investment not appealing at the moment.
Heartland estimates that the deal will create the fifth largest asset-based truckload fleet in North America. Gordon’s equipment includes some 2,000 tractors and 6,500 trailers, concentrated in the Western markets of the US. Key large customers include General Mills, Pepsi, Wal-Mart and Unilever.
CEO and Chairman Michael Gerdin commented on the rationale behind the deal, “We searched for many years for the best fit to expand our capabilities for customers, our opportunities for drivers, and our growth for our stockholders. With GTI, Heartland acquires a major presence in the West, affording the combined customer base significant capacity nationwide through what is expected to be one of the five largest asset-based truckload fleets in North America.”
Excluding deal-related expenses, the deal is expected to be immediately accretive to Heartland’s earnings per share. Heartland will furthermore expect to generate $60 million in net present value of future tax savings.
The deal values Gordon Trucking at roughly 5.0 times EBITDA for the trailing twelve months. Note that Gordon Trucking could stand to make an earn-out of $20 million if consolidated adjusted operating income could increase by $30 million through 2017.
Heartland Express ended3 its third quarter of the year with $171.1 million in cash and equivalents. The company operates without the assumption of debt, for a solid net cash position. Heartland will use some $165 million in cash and $95 million in debt to finance the deal, resulting in a net debt position of around $90 million. Another $40 million will be financed through the issuance of treasury shares of Heartland Express, resulting in modest dilution of around 3%.
Gross revenues for the first nine months of the year came in at $398.9 million, down 2.6% on the year before. Net earnings rose by 15.8% to $54.7 million in the meantime. At this pace, annual revenues could come in around $535 million as earnings could total $70 million.
Factoring in gains of 25% on Tuesday, with shares trading at almost $18 per share, the market values Heartland at $1.52 billion. This values operating assets of the firm at around $1.35 billion. As such, operating assets are valued at 2.5 times annual revenues and 19 times annual earnings.
Heartland Express currently pays a modest quarterly dividend of $0.02 per share, for an annual dividend of 0.4%.
Some Historical Perspective
Over the past decade, investors in Heartland Express have invested in a very “boring” company. Shares have traded in a relative tight $12-$18 trading range for most of the past decade, currently trading near the high end of the range.
Between 2009 and 2012, Heartland Express has increased its annual revenues by nearly a fifth to $545 million. Earnings rose modestly to $61 million, after peaking at $70 million in 2011.
Gordon generated annual revenues of $433 million and $20 million in operating income. The $300 million price tag values the company at 0.7 times annual revenues and 15 times operating earnings.
The real interesting part are the targeted synergies. By 2017, Heartland expects to boost consolidated operating earnings by $30 million per year. This compares to pro-forma operating earnings of $96 million at the moment.
As such, the combined firms are on track to generate annual revenues of roughly a billion, on which they stand to report operating earnings of $96 million, which could increase towards $125 million in four year’s time. The new $1.6 billion market capitalization values the pro-forma operations at 1.6 times annual revenues and 13 times operating earnings.
The $300 million price tag is quite attractive at 0.7 times annual revenues, compared to Heartland’s valuation at 2.5 times revenues. Shares trade at 15 times operating earnings in case of Gordon, compared to a 19 times multiple for Heartland. The $30 million in expected annual synergies alone, could already justify the majority of the $300 million price tag.
Note that investors in Heartland already realize this, boosting the value of the company by some $300 million on Tuesday.
While the deal seems great, and is applauded as such, the valuation of the pro-forma assets is not appealing to me. The pre-deal valuation of Heartland was too high for me to justify an investment at these levels.
As an owner driver you will have the sometimes difficult job of obtaining contracts on a regular basis. You might be able to acquire contracts from the major companies who specialise in the delivery of courier loads. It might also be worth advertising in the local newspapers and encouraging friends to mention your outstanding service. This article contains further information about the effective marketing methods to get you more work.
Web Based Marketing
The great range of potential advertising opportunities that abound may surprise you. Those who are keen to make the most of modern technology might be interested in methods such as search engine optimisation and pay per click marketing. There is also the option of registering with the major freight exchanges and contacting the companies who are interested in the transportation of courier loads. For further advice you should log on to the relevant online forums.
The Traditional Approach
You can increase the appeal of your business by mixing online marketing with more traditional means of promotion. It is an excellent idea to have some flyers and business cards printed for local distribution. You could advertise on the notice boards typically found in cafes and high street shops. Alternatively you may buy some advertising space in a local newsletter. If you’re really desperate to earn a living by transporting courier loads, it might sometimes be necessary to do some cold calling to start with.
Find Out What Works For YouIt is worth pointing out that different marketing methods will have a varying impact on the business fortunes of different owner drivers. If you live in a built up residential area, leaflet drops may prove effective. If you live out in the sticks you’d be better advised to spend time marketing your business online. You need to measure the impact the different marketing methods have over time for your particular business.
Enjoy the Benefits Of Hard Work
If you implement a comprehensive marketing campaign it will only be a matter of time before potential customers start calling. You’re advised to select the types of jobs you are confident of completing. This may mean anything from delivering valuable courier loads to foreign customers to transporting livestock to local markets. It will be important to maintain a professional and highly positive attitude no matter which jobs you choose. If you work effectively and are nice to your customers you can be sure your services will be recommended.
There are a number of websites that offer potentially valuable information to professional owner drivers. Some of them deal with the specific issue of business finance, while others provide marketing guidance. It might also be worth asking experienced couriers whether they can provide any useful tips.
About the Author
Norman Dulwich is a correspondent for Courier Exchange, the world’s largest neutral trading hub for same day courier loads1 in the express freight exchange industry. Over 2,500 transport exchange businesses are networked through their website, trading jobs and capacity in a safe ‘wholesale’ environment.
These United States of ours are wide and varied in their cultures and customs, but driving your pickup truck up the steps of your state capitol is considered universally unacceptable wherever you go. A Utah man learned this the hard way yesterday after police got “hands on” with him.
Salt Lake City TV station KSL1 reports that the suspect, 36-year-old Gerald Green, drove his truck up the steps on the west side of the capitol. He then parked next to the doors, wandered inside and began banging on the locked doors of the Utah Supreme Court where he reportedly screamed “This is my house. I demand to be in my house.”
Needless to say, Utah state troopers were not pleased with the situation.
“The suspect was noncompliant,” Utah Highway Patrol Capt. Barton Blair said. “A Taser was deployed. He was wearing loose-fitting clothing, which made that Taser ineffective, and our troopers ended up going hands on, as we say, with the individual and taking him into custody.”
Emphasis mine. It’s true that tasers can be less effective if the one getting tased is wearing thick or loose clothing. It’s also possible that these troopers just wanted an excuse to kick his ass. Can you blame them? The dude drove a truck up the capitol steps.
Charges are pending for Green. I wonder how many points you get on your license for that?
Hat tip to Matthew!
Knight Transportation (KNX1) is one of the leading short and medium haul truckload transporters. The down and dirty is that the stock is trading at 8.9x price to operating cash flow with a return on equity of 13.4%. Its current ratio is 2.5 and it has a debt to equity ratio of a mere 5%. All in all, the stock has a rock solid balance sheet and appears to be trading on the cheap.
KNX provides temperature-controlled carriers and port drayage services via 29 operations center, a fleet of over 3,500 company owned tractors, and 9,500 company owned trailers. What’s more is that its 29 operation centers are located across the U.S., allowing the company to better cater to regional markets and customers.
The truckload carrier market is a large market, estimated at $300 billion. Of which, KNX has less than 1% of the market. The market for truckload is also highly fragmented, with the top ten carriers owning less than 10%.
The truckload market is different than the less than truckload market. What this means is that truckloads moves larger amounts of cargo, enough to fill a semi-trailer. Less than truckload mixes freight from a variety of customers. And unlike less than truckload carriers, full truckload cargos never changes trailers.
As noted, the business is highly fragmented and the barriers to entry are generally low for the most part. The industry also has over 30% of operating expenses tied to labor costs, while another 20% or so is tied to fuel expenses. However, this isn’t the end of the world, where many of the major carriers are able pass along around four-fifths of fuel costs to customers.
Knight has been a pioneer in the expansion to the refrigerated and port drayage markets, giving it a first mover advantage. As well, geographical expansion is in the cards for the company.
The other benefit to KNX’s operating center diversity and locations spread across the U.S. is that it offers increased efficiencies. Its widespread operating center locations allow for shorter hauls, which tends to be more attractive for drivers, which, as mentioned, is the industry’s top cost. The shorter hauls help increase driver retention and reduce turnover, ultimately reducing training costs. Knight also has programs in place for driver development and training to source drivers and turn them into Knight company drivers. As a result, Knight has one of the lowest driver turnover ratios in the industry.
The other big benefit for Knight is that its top customers (a blend of manufacturers and retailers), is one of the least concentrated among the major truckload operators. Its 25 largest customers only account for around 40% of revenues.
The latest. 2Q EPS came in as expected, at $0.24, with revenue slightly below estimates. However, freight revenue was up 6% year over year and total revenues increased 3.6%. But KNX lowered its 3Q EPS guidance to the $0.22 to $0.24 range, from $0.22 to $0.25, so not a big change.
CEO, Kevin Knight, noted about the quarter…
“We have continued to expand our market share in our wide range of truckload logistic services in a challenging operating and economic environment. Our consolidated revenue, before trucking fuel surcharge, increased 6% on a year over year basis. Our non-asset service offerings lead the way with revenue growth of 64.2%, and now make up approximately 20% of our total revenue before trucking fuel surcharge…we experienced an improvement in our revenue per tractor compared to the same quarter last year, while operating income was essentially unchanged.”
One of the big takeaways for the quarter and from Knight’s comments is that the company is rapidly diversifying its revenue stream, specifically, non-asset revenues. Its non-asset businesses includes intermodal and brokerage services, and accounted for 20% of revenues during 2Q 2013, but this number could move to 50% over the next couple of years. Just 3 years ago, the non-asset based businesses comprised just 4% of total revenues.
Regulation as a tailwind?
While the new driver regulation might decrease productivity, it should be a long-term positive for the trucking companies. Back in July, the rules governing truck driver hours were changed. The basic point is to give truck drivers more sleep and rest. The allowed work week was reduced from 82 hours to 70. Of course, the trucking companies are believe the move will cost them money, where it will take more trucks to haul the same number of loads.
So why is this a positive? Truckload carriers will now be working more closely with shippers to increase productivity. What this will ultimately do is give carriers more control over load pickups and dropoffs, allowing for productivity gains and helping foster long lasting partnerships among the truckload carriers, shippers, railroad operators and airlines.
Now that the bigger operators like Knight know the rules, they’ll make the appropriate changes to their networks, equipment and drivers. The regulation will have a greater impact on the smaller players and give the bigger companies like Knight a competitive advantage.
From a valuation standpoint, KNX trades at only 19x earnings, but its five year average is closer to 25x. If we couple KNX’s solid growth and cheap valuation, the company looks to be a solid play in the industry.
We see EPS growing nicely over the next couple of years, from the $0.82 the company posted in 2012 to $1.09 in 2015.
If we assume that as the market rebounds, so will KNX’s multiples (to the historical 25x), we see total upside of over 65% for the next two and a half years.
Not only will a strengthening U.S. economy boost the company, but so will multiples expansion. Knight has historically traded at a an impressive premium to the S&P 500 P/E, but it currently on trades at a 2.1 point premium — compared to the near 9 point premium the company has averaged over the last decade.
Why we love the company…
- A steady rebound in return on invested capital. Growing from 10% in 2009 to 12.4% over the trailing twelve months.
- The average age of its tractors is only 2 years old — a young fleet.
- Free cash flow so far this year is up to $55 million, compared to the $5 million in all of 2012.
- In the past 2 years, the company has returned $78.5 million to shareholders through dividends and share repurchases.
- Knight has only $26 million in debt after repaying $54 million of its outstanding debt on its unsecured line of credit.
- The Knight family owns 25% of the company.
While the truckload market remains highly fragmented, we see the company’s initiative to continue growing its fleet is a positive. Toward the end of 2012, KNX was still beefing up its fleet, this was despite a continued weakening freight market. The company still hopes to boost its tractor count in the mid single digits this year. We believe that the company is taking the long term view by taking advantage of cheap pricing in the fleet markets.
This should position the company nicely to snatch up market share and ride the tailwinds of a growing economy. Don’t forget its 1.5% dividend. Modest, yes, but still gives investors income while they wait on the market to rebound and for other investors to realize Knight’s potential.
Forward Air Corporation
Often times there are excellent businesses operating in industries that are either difficult to understand, obscure or unattractive. Sometimes good investments can be found in these regions precisely because of these factors as many investors don’t take time to understand specific businesses or they simply don’t know they exist. For whatever reason, certain industries are often overlooked and when this happens – value can often be found. One such industry in my opinion is freight logistics – including freight consolidation and freight forwarding.
Even though the big names including UPS1 and Fedex (FDX2) are known worldwide – the logistics universe is much more nuanced and is home not only to highly efficient but prosperous operators including CH Robinson Worldwide (CHRW3) and Expeditors International of Washington (EXPD4) – two companies that have produced excellent results and solid dividends for shareholders over the course of their history. A smaller company focused on air freight logistics that has recently caught my interest is the Forward Air Corporation (FWRD5).
Examination of Forward Air reveals that it has many of the same qualities of both CH Robinson and Expeditors – except it is much smaller than both. I believe the Forward Air Corporation represents an advantageously situated play in the air freight market.
The Numbers on FWRD
With a market cap of $1.16 Billion, almost no debt, $2.37 of cash plus $12.70 of book value against a current price of $38.53 – FWRD trades at a considerable premium to its tangible assets – however this is the norm for companies in logistics industry as both CHRW and EXPD both trade at considerable multiples. With a dividend yield of 1.1% and a payout ratio of .21 – FWRD does reward shareholders albeit in a parsimonious fashion – however this might not be that big of a problem If the company is able to retain and compound its earnings internally at the rate that it has in the past (in 2012 the return on assets was 14% – a rate that is much higher than the risk-free alternatives investors could place their cash dividends into).
What Type of Business This Company Does
The Forward Air Corporation operates in two segments and provides logistical services to handle overnight, next day, and multi day delivery to a network of airports throughout the United States utilizing ground transport. Per the companies 10K6, in 2012 – 23.9% of the company’s freight was for overnight delivery, 61.3% was to be delivered within two to three business days with the remaining amount longer than four business days.
The company also does not compete directly with UPS or FEDEX, instead their Airport-to-Airport forwarding services are marketed to freight-forwarders, passenger and cargo airlines. In contrast to UPS or Fedex, Forward Air also does not employ size restrictions on its cargo – which prevents it from competing in the small-parcel sector dominated by the largest players in the market. In 2012 the average shipment weight was 637 pounds, a far cry from many of the parcels which are delivered by Fedex or UPS.
Forward Air has also been able to thoroughly diversify its customer base – which in my opinion is critical for revenue stability and reduces the risk that the loss of a single major customer could produce a permanent impairment of company earnings. In 2012, the company’s 10 largest customers produced 47.2% of Forward Air’s operating revenue with no single entity accounting for more than 10% – statistics which I am very happy about given the dangerous nature of overconcentration or excessive reliance upon a single customer.
The company is also a lean enterprise that operates with almost no debt and does not own large amounts of equipment – instead purchasing its transportation from other companies. The ability to purchase transportation instead of maintaining a fleet of equipment, vehicles and personnel provides critical flexibility to respond to changing weather and other conditions that could otherwise impede the flow of time sensitive shipments.
As a service company trading at a premium to book value plus cash, it is important to understand what will adversely impact this business in order to make an informed purchase and mitigate the risk of capital loss. First and foremost, this company generates its revenue off of commercial activity in the United States. If there is a broader decline in commercial activity – as seen during the financial crisis – the company’s revenue will suffer. However – I believe that investors should not despair about this as there is considerable opportunity to be had during these periods to purchase an efficient enterprise with no debt at a fair price.
The company is also at the mercy of high fuel prices – because it purchases its transportation needs, the company must accept the terms offered by the transportation companies that it contracts with and has not utilized a hedge of any type. Though it is likely able to pass some of these costs onto customers in the form of higher rates charged per pound – such activity could adversely impact the companies profitability. In addition, the company’s labor force is non-union and if this status changes I believe the potential impacts on the profitability of the enterprise would be considerable.
From a perspective of the stock and not the business – the company trades at a relatively light volume (less than 100,000 shares on average) and this light volume could be easily punctuated by aggressive buying or selling on the part of large holders or funds – producing large anomalous fluctuations and in turn creating opportunity for investors seeking to establish or add to their holdings.
Acquisition Potential: A Two Way Street
I think that FWRD would be a good acquisition target for several reasons. It’s business model is lean, and it carries no debt – in addition the company has good free cash flow – because of these three factors I believe that a larger company in the logistics sphere seeking to diversify its operations could purchase FWRD or that FWRD could purchase smaller companies to create more synergies in the air transport industry – in addition the companies free cash flow could also be utilized in concert with debt financing to buy back a significant amount of stock in order to enhance shareholder value.
An interesting facet of the logistics sector is that many companies have no debt, large cash reserves or the ability to generate a large amount of free cash flow – indicating considerable potential for a large accretive acquisition. I believe that it is possible for FWRD to be acquired by a large logistics company including J.B. Hunt (JBHT7), CH Robinson or Expeditors International. These three companies are both much larger than FWRD and specialize in logistics co-ordination. Of these three companies, I would see a potential acquisition from Expediters as being the most natural as the company has a large amount of cash in reserve and one of its business segments is “domestic time definite transportation services” – a service which FWRD specializes in.
Looking down the food chain, an interesting company that has the potential to contribute to FWRD’s business is Universal Truckload Services Inc. (UACL8). With high levels of insider ownership (at 82% currently) and a similar asset return profile as FWRD (in addition to a liberal dividend policy, having paid significant annual dividends in two of the past three years).
Watch the Entry Point
One of the difficulties I have experienced with investing in logistics companies is finding a compelling entry point. Due to the fact these companies operate without significant debt and often demand higher premiums because of the innate profitability of the enterprise, it is often impossible to find a “cigar butt” in this industry. This is not a bad thing however, as Buffett has always said that it is “better to buy a wonderful business at a fair price.”
At these current levels, I would not be a buyer of FWRD. I love the business but I don’t love the price. I believe that if the company were to fall closer to the $30~32 dollar range it would represent a significant bargain to investors. Another event that would make me a buyer of FWRD is if macro-economic factors cause a decline in business activity. While in the short term a slower economy would translate into lower earnings for FWRD, I believe that in the long term the company will remain profitable given its steady increase in pounds of freight transported per year, its diversified revenue base, strong balance sheet and the ability to remain profitable during the last financial crisis.
The Rise of E-Commerce and Why I’m Bullish Longterm on FWRD
One of the most interesting things to come out of the widespread development of E-Commerce is the growth of services including “next day” or expedited shipping offered by companies either attempting to enter or remain competitive within the space. As more companies compete within the space and as consumer habits continue to change – I believe that there will naturally be a corresponding increase in air traffic – making time sensitive transport of consolidated freight to and from airports of substantial and growing importance within the United States.
I am of the belief that FWRD furnishes investors with the opportunity to harness and profit from this trend going forward, as consumers begin to order more and heavier items. FWRD will be able to form relationships with merchant companies and will have the ability to both consolidate large amounts of customer orders and to transport them rapidly to airports where they will be shipped.
For investors seeking an obscure yet promising company, FWRD merits an addition to a watch list. The strong balance sheet, diversified revenue base and niche business indicates the enterprise has been and will continue to be extremely profitable over the long haul. In spite of these attractive qualities, I also believe that investors must be careful about the purchase price – and while paying a premium on the company’s assets is likely to be inevitable it is important to buy this company at a “fair” price.
- ^ United Parcel Service, Inc. (seekingalpha.com)
- ^ FedEx Corporation (seekingalpha.com)
- ^ CH Robinson Worldwide Inc. (seekingalpha.com)
- ^ Expeditors International of Washington, Inc. (seekingalpha.com)
- ^ Forward Air Corporation (seekingalpha.com)
- ^ 10K (phx.corporate-ir.net)
- ^ J.B. Hunt Transport Services, Inc. (seekingalpha.com)
- ^ Universal Truckload Services, Inc. (seekingalpha.com)
Following the launch of the new Scania Streamline and Volvo FH Series, the organisers of the Mondello Truck Show , in County Kildare, Ireland, July 20-21 are looking to owners of classic Scania Streamline Centurion trucks and the best examples of the Volvo F88/89 ranges to exhibit alongside the all-new models…
Following the launch of the new Scania Streamline and Volvo FH Series, the organisers of the Mondello Truck Show , in County Kildare, Ireland, July 20-21 are looking to owners of classic Scania Streamline Centurion trucks and the best examples of the Volvo F88/89 ranges to exhibit alongside the all-new models that will be on display at Motor Racing Circuit.
With the introduction of the new Scania Streamline based on the existing R-series, interest has been rekindled in the original model which dates back to the early 90 s, explained John Morris, Managing Director, Mondello Park.
We know that there are quite a number of Centurions as they were called, still working out there and we would love to see them at the Mondello Truck Show, he added.
After more than a ten-year absence and repeated requests from the industry, the Mondello Truck Show makes a welcome return. The two-day festival differs from others, in that our purpose built facility and on-track action provide a unique location for the industry to show its wares and for members of the road transport industry to celebrate their profession, Morris said
Owners of Scania Streamlines and Volvo F88/89 interested in coming to the Mondello Truck Show are asked to contact Mondello Park on 00 353 (0) 45 860200 or by email to email@example.com
- ^ Posts by admin (www.haulagetoday.com)
- ^ Comment on Mondello Truck Show wants classic Scania and Volvos (www.haulagetoday.com)
Non asset-based third-party logistics services provider Roadrunner Transportation Systems Inc. 1(RRTS) continues to stay true to its theory of growth by acquisition, saying yesterday it has brought two new companies into the fold: Adrian Carriers, a Milan, Illinois-based logistics service provider focusing on container management and intermodal, and Wando Trucking, a Charleston, South Carolina-based provider of intermodal services and related services in the Southeast.
The purchase price for Adrian was roughly $14.2 million, plus and an earn-out capped at $6.5 million, and the purchase price for Wando was roughly $9 million, with that acquisition financed with borrowings under Roadrunner s credit facility, according to RRTS officials.
These acquisitions mark the ninth and tenth acquisitions RRTS has made going back to 2011 and they mark the first ones since its December 2012 public offering of 3,500,000 shares of common stock at a price of $17.25 per share to the public.
RRTS officials were not available for comment at press time. The company is announcing first quarter earnings later today.
Adrian Carriers: RRTS said that Adrian manages the transaction of containerized import and export freight throughout the U.S. and is at the forefront of technical development of container management systems and software. It added that in 2012 Adrian generated revenues of roughly $32.5 million and that Adrian is expected to be accretive to Roadrunner s 2013 earnings.
The acquisition of Adrian expands our TMS capabilities within intermodal services and container management, said Mark DiBlasi, President and CEO of Roadrunner, in a statement. In addition, Adrian s service offering, combined with its superior reputation, enables us to cross-sell our current intermodal services. Gary Adrian and his team will remain in place and are excited about the growth opportunities we collectively envision.
Stifel Nicolaus Analyst David Ross wrote in a research note that the acquisition of Adrian Carriers by RRTS could serve as a launching pad from which the company can get bigger in the international container management business.
We continue to view Roadrunner as a company that plans to grow through any type of economic environment over the next few years, and its acquisitions recently have been small bolt-ons with relatively low-risk integrations, which we believe are better than larger deals, wrote Ross.
Wando Trucking: RRTS said Wando mainly moves imports and exports, including raw rubber, building materials, paper, and plastics from the ports of Charleston, South Carolina, and Savannah, Georgia. During 2012, RRTS said Wando generated roughly $13.0 million in revenues, and it said Wando is expected to be accretive to Roadrunner s earnings in 2013.
Robert W. Baird & Co. Analyst Ben Hartford wrote in a research note that Wando operates a fleet of roughly 110 power units and noted that Wando will compliment Roadrunner s February 2011 acquisition of Morgan Southern2, a privately-held provider of intermodal transportation and related services for roughly $20 million.
A South African shipping company is making a run at taking control of Adcock Ingram1, the country’s second largest drugmaker, and given its board until next week to decide if it is onboard with the deal. South Africa is a growing drug market, and this unsolicited offer comes even as India2‘s Cipla3 is angling for control of the next biggest player there.
Bidvest Group late last week made what Bloomberg says is a R6.2 billion ($670 million) offer for 60% of Adcock Ingram. Bidvest already owns a 2.54% stake, according to a notice from the drugmaker. The New Age reports that if the board does not recommend the offer to its shareholders, Bidvest intends to get hostile by taking it to them directly. Adcock said in its notice that it is evaluating the offer, and Bidvest told Bloomberg it would not comment beyond its offer letter.
An unnamed analyst told The New Age that the offer comes at an opportune time. Adcock Ingram is the country’s second-largest drugmaker behind Aspen4. Its shares, however, have been underperforming those of Aspen and Cipla Medpro5 after it spent money to expand its manufacturing. That was done in anticipation of increased production, and revenues, because it has a government contract to make HIV medicines as part of the country’s expansion of its national health insurance program.
South Africa is the continent’s largest economy, with a growing middle class, factors that have attracted growing interest in its drug market. Aspen has been expanding, even outside of the country. India’s Cipla is trying to gain control of Cipla Medpro, the third largest drugmaker, and recently upped its bid to about $500 million to get its ownership to 51%. Sandoz, the generic unit of Novartis ($NVS6), also recently announced plans to expand its manufacturing in South Africa to take advantage of the growing market.
DAF Trucks NV is a division of Pacific Car and Foundry Company (PACCAR) and is a Dutch truck manufacturing company. The headquarters of DAF is in Eindhoven, where the main manufacturing plant of the company is also located. The Westerlo factory in Belgium manufactures some Cabs and axle assemblies. Some models of trucks that are sold with the DAF brand are also designed and manufactures by Leyland Trucks in the Farrington plant of Leyland. The first truck produced by DAF was in 1949 and was called the A30. This was subjected to numerous upgrades as the wars went by. The first attempt of the company to venture into the international market with the model 2000DO was a complete failure. But their next model the 2600 became a best seller in the international market. DAF Trucks were the first to be fitted with turbo charged diesel engines and now is very common in trucks.
DAF Trucks market share in Europe
The market share of DAF Trucks has been steadily increasing in the last few years. They have a share of about 16% in the heavy segment. Heavy segment is the segment where the payload capacity is more than 16 tonnes. In the heavy tractor segment the company has a market share of about 19.1%. DAF Trucks are the second largest truck brand in European Union and they lead the markets in Hungary, Poland, UK, Czech Republic, Belgium and the Netherlands. The increase in market share of DAF Trucks is largely attributed to the strong and loyal customer base that they have been able to achieve over the years and with the new models that have been launched getting great reviews, the company is expected to strengthen its position in the European market.
DAF Truck Models
DAF Truck Models are sold as three different model series CF series, XF series and LF series.
Lately there has been a new addition to the model series of DAF and that is the LF Hybrid series
The XF series is said to be built for the long haul and has low operating costs, high reliability and the best driver satisfaction. The cabin is very spacious and is very comfortable for the driver and is a top performer.
The CF series is available in tractor or in rigid chassis and is said to have excellent maneuverability and the multifunctional chassis makes it ideal for every application
The LF series is very good for distribution in urban or rural areas. Agility in traffic, low curb weights, tight turning radius and easy maneuverability is the aspects of these models. LF series is also available in Hybrid versions.
The future of DAF Trucks
Even though there is a decrease that is seen in the commercial vehicles market1 of about 9% in 2012 when compared to 2011, DAF trucks have been able to maintain its growth and has become the second largest commercial tuck brand in Europe and the recent trends are suggesting that this will continue as the DAF trucks are becoming a good option for truck buyers.
The ATA said that seasonally-adjusted (SA) truck tonnage in December at 121.6 (2000=100) increased 2.8 percent in December, following a 3.9 percent (upwardly revised from 3.7 percent) gain in November, which was the first monthly gain for the SA since January and also snapped a three-month skid of declines representing a cumulative drop of 4.6 percent. What s more, the ATA said that consecutive increases in November and December were by far the best gains of 2012.
On an annual basis, the SA was down 2.3 percent compared to December 2011, which the ATA said marks the worst annual result for the SA since November 2009, when it fell 3.5 percent compared to November 2008.
ATA officials said that for calendar year 2012 SA tonnage was up 2.3 percent, following a 5.8 percent gain in 2011.
The ATA s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 110.3 in December, representing a 4.9 percent decline from November and a 5.4 percent decline from the 116.4 recorded from December 2011.
As LM has reported, some industry analysts maintain that the not seasonally-adjusted index is more useful, because it is comprised of what truckers haul. As defined by the ATA, the not seasonally-adjusted index is assembled by adding up all the monthly tonnage data reported by the survey respondents (ATA member carriers) for the latest two months. Then a monthly percent change is calculated and then applied to the index number for the first month.
December was better than anticipated in light of the very difficult year-over-year comparison, ATA Chief Economist Bob Costello said in a statement. As paychecks shrink for all households due to higher taxes, I m expecting a weak first quarter for tonnage and the broader economy. Since trucks account for the vast majority of deliveries in the retail supply chain, any reduction in consumer spending will have ramifications on truck tonnage levels.
Costello added that he anticipates more sluggishness in the index this year, especially early in the year, as the economy continues to face several headwinds.
When the ATA issued November tonnage data late last year, the Fiscal Cliff negotiations between the White House and Congress were top of mind. Costello said at that time that tonnage growth could decelerate in 2013, with better housing starts and auto sales offset by slower factory output and consumer spending.
And with a Fiscal Cliff agreement reached earlier this month, it appears his outlook is in line with what is happening in the market.
As previously reported, shippers and carrier have repeatedly told LM that volumes remain in a holding pattern to a certain degree, with no real positive indications that things will change soon.
This ATA data comes at a time when the economic outlook remains largely muddled, with promising housing starts and automotive sales, as well as employment figures gaining some traction. Conversely, issues regarding the nation s debt ceiling and sluggish retail sales and slow industrial production growth make for a mixed batch, as per the usual.
When you look at what has happened in both the freight economy and the overall economy over the last 9 months, things have really flattened, said Eric Starks, president of freight transportation forecasting firm FTR Associates, in a recent interview. It is a somewhat stagnant environment, especially with retail sales.
- All About Trucks
- Audio And Video Accessories
- Camera And Photo
- Car And Vehicle Electronics
- Computers + Components And Accessories
- eBook Readers And Accessories
- Electronics Accessories
- Hi-Fi And Home Audio
- Home Cinema + TV And Video
- Household Batteries And Chargers
- Memory Cards
- Mobile Phones And Communication
- Portable Sound And Vision
- Sat Nav + GPS + Navigation And Accessories
- Telephones + VOIP And Accessories
- General Blog Enteries
- Haulage News Blog
- HGV Job Search
- Import – Export
- Import From China
- Library Referance
- Referance Articals
- Trucker Spot
- Trucker Talk
- Used Volvo
- Zibb Blogs
- Anonymous on Faithfull Adjustable Pin Key for Angle Grinders
- Anonymous on Faithfull Adjustable Pin Key for Angle Grinders
- lurcher110 on Faithfull Adjustable Pin Key for Angle Grinders
- DaveP "batbox" on Draper Expert 44986 Stainless Steel Hand Trowel with FSC-Certified Ash Handle
- J. Dye on Draper Expert 44986 Stainless Steel Hand Trowel with FSC-Certified Ash Handle