transportation & logistics industry update · integrating digital technology, fulfillment,...

Transportation & Logistics Industry Update

March 2014

www.harriswilliams.com

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March 2014

Welcome to the March edition of the Harris Williams & Co. Transportation & Logistics (T&L) newsletter. We use this forum to keep you (investors, senior managers, entrepreneurs, and others focused on the T&L sector) up to speed on what we are seeing in our sector, apprised of industry news and events, and connected to the T&L companies that we are fortunate to work with everyday. We will continue to bring you transcripts of relevant discussions we have with senior industry professionals, like this month’s discussion with Rick Webb, Chief Executive Officer of the Watco Companies. We also want to keep you apprised of the transactions we are executing in our various sub-sectors, including non-asset and asset-based logistics, air, rail, marine products and services, and infrastructure. We hope you enjoy reviewing this edition and please continue to email and call us with your thoughts and opinions. We want to ensure that this newsletter is informative and helpful as you focus on the transportation and logistics space.

Regards,

Contacts Frank F. Mountcastle, III Managing Director

[email protected] +1 (804) 915-0124

Jason D. Bass Managing Director


Joseph H. Conner, III Managing Director


Greetings from the HW&Co.

Transportation & Logistics Team

Boston Cleveland Frankfurt London Minneapolis Philadelphia Richmond San FranciscoP: +1 (617) 482-7501 P: +1 (216) 222-9870 P: +49 069 3650638 00 P: +44 20 7518 8900 P: +1 (612) 359-2700 P: +1 (267) 675-5900 P: +1 (804) 648-0072 P: +1 (415) 288-4260

F: +1 (617) 482-7503 F: +1 (216) 222-0158 F: +49 069 3650638 01 F: +44 20 7526 2187 F: +1 (612) 359-2701 F: +1 (267) 675-5901 F: +1 (804) 648-0073 F: +1 (415) 288-4269

mailto:[email protected]





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March 2014

Spotlight: Recent HW&Co.

3PL Transaction

HW&Co. Advises the Special Committee of the Innotrac Corporation Board of Directors in its Recapitalization Led By Sterling Partners.

Harris Williams & Co., a preeminent middle market investment bank focused on the advisory needs of clients worldwide, announces the recapitalization of Innotrac Corporation (NASDAQ: INOC; Innotrac), a provider of eCommerce, fulfillment and logistics services, led by Sterling Partners (Sterling). Harris Williams & Co. acted as the exclusive advisor to the Special Committee of the Board of Directors of Innotrac and also provided a fairness opinion. The transaction closed on January 6, 2014 and was led by Jason Bass, Frank Mountcastle, Jeff Burkett and Mike Williams.

Innotrac, founded in 1984 and based near Atlanta, GA, is a best-in-class eCommerce provider integrating digital technology, fulfillment, contact center and business intelligence solutions to support global brands. The company’s fulfillment, order management and contact center solutions are integrated with all major web platforms, and seamlessly integrate with any required partner technologies. Innotrac employs sophisticated order processing and warehouse management technology and operates eight fulfillment centers and one call center spanning the continental United States. Innotrac Europe GmbH also has a network of fulfillment centers, call centers and returns processing facilities with operations in the United Kingdom, Germany, France, Denmark, Sweden, Poland, Austria, Italy, Switzerland, Ireland, Spain and the Netherlands. Sterling, founded in 1983, is a growth-oriented, private equity firm. Sterling manages more than $5 billion in institutional capital. The firm’s investment approach is centered on INSPIRED GROWTH™, a philosophy of buying differentiated businesses and growing them in inspired ways. Sterling focuses on investing growth capital in small and middle market companies in industries with positive long-term trends, including education, healthcare and business services. The firm provides valuable support to the management teams of the companies in which it invests through a deep and dedicated team of operations and functional experts based in the firm’s offices in Chicago, IL, Baltimore, MD and Miami, FL.

has been recapitalized by

a portfolio company of

has been acquired by



Date: March 6, 2014 Description: PLG is a leading provider of gateway logistics services, including value-added warehousing and distribution, transloading and cross-docking, vendor consolidation and national transportation.

Date: March 14, 2014 Description: Unitrans offers its customers international ocean and air transportation management, customs house brokerage, and domestic logistics solutions, with a focus on complex, cold chain, and high value shipments.

Other Recent HW&Co.

3PL Transactions

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March 2014


Surface Transportation

Transaction

HW&Co. Advises RTL-Westcan Group of Companies on its Sale to Kenan Advantage Group

Harris Williams & Co., a preeminent middle market investment bank focused on the advisory needs of clients worldwide, announces the sale of RTL-Westcan Group of Companies (RTL-Westcan), a provider of specialized bulk transportation and logistics services, to strategic buyer Kenan Advantage Group (KAG). Harris Williams & Co. acted as an advisor to RTL-Westcan, a portfolio company of TriWest Capital Partners (TriWest). The transaction closed on November 15, 2013 and was led by Frank Mountcastle, Jason Bass, Joe Conner, Jershon Jones and Jeff Kidd from Harris Williams & Co.’s Transportation & Logistics (T&L) Group.

“RTL-Westcan has built an impressive platform for bulk hauling in Western Canada. The geographic areas served by the company represent some of the fastest growing regions in North America,” said Frank Mountcastle, a managing director in Harris Williams & Co.’s T&L Group. “This partnership will enable RTL-Westcan to continue to execute its growth strategy while also providing KAG with a strategic platform to continue its expansion into new geographies and new markets in North America. This transaction is a great outcome for all parties involved.” Founded in 1964, RTL-Westcan specializes in hauling liquid and dry bulk commodities, freight hauling and construction services. The company has expanded from a single product service offering to a highly diversified bulk hauling platform serving the energy, mining, agriculture and infrastructure end markets. RTL-Westcan is headquartered in Edmonton, Canada and operates out of 14 locations throughout Alberta, British Columbia, Saskatchewan and the Northwest Territories. TriWest, founded in 1998 and based in Calgary, Alberta, is one of Canada’s leading private equity firms. TriWest has raised more than $775 million in committed capital through four funds and invested in 27 companies to date. These investments have involved the acquisition of market-leading companies through management buyouts, growth financings, corporate divestitures and other special situations. KAG is North America’s largest tank truck transporter and logistics provider to the petroleum, specialty products and merchant gas industries. It operates nationwide through its four groups consisting of the Fuels Delivery Group, Specialty Products Group, Merchant Gas Group and the Logistics Group. KAG also provides specialized supply chain logistics services through KAG Logistics and KAG Ethanol Logistics.


&



http://www2.goldmansachs.com/

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March 2014


Rail Services Transaction

HW&Co. Advises A&B Rail Services Ltd. on the Sale of a Majority Interest to a Group of Investors led by TorQuest Partners

Harris Williams & Co., a preeminent middle market investment bank focused on the advisory needs of clients worldwide, announces the sale of a majority interest of A&B Rail Services Ltd. (A&B Rail), a provider of rail maintenance, construction and related services, to a group of investors led by TorQuest Partners (TorQuest), a leading Canadian-based manager of private equity funds. Harris Williams & Co. acted as the exclusive advisor to A&B Rail, a portfolio company of Fulcrum Capital Partners (Fulcrum). The transaction closed on December 12, 2013 and was led by Jason Bass, Joe Conner, and Jeff Burkett from Harris Williams & Co.’s Transportation & Logistics (T&L) Group.

“Over the past 48 years, A&B Rail has developed into the leading provider of critical railway infrastructure services in Canada. In partnership with Fulcrum, Paul Brum (President of A&B Rail) has built the best management team, employee base and service platform in the industry and A&B Rail has become the go-to-provider of critical services in one of the fastest growing, most dynamic rail markets in the world,” said Joe Conner, a managing director in Harris Williams & Co.’s T&L Group. “We appreciate having had the opportunity to help Paul and his team, who remain significant shareholders of the business, find the right partners to continue to build their business and deliver outstanding service to the market.” “The sale of A&B Rail represents another marquee transaction for our practice in the rail sector, one of our core focus areas, and is evidence of continued interest across the rail industry and, specifically, outsourced rail maintenance services,” added Jason Bass, a managing director and co-head of the firm’s T&L Group. “Favorable market trends, including steady carload growth through increased truck-to-rail conversions, environmental considerations and increased outsourced maintenance, make the rail sector an attractive industry for investors.” Based in Edmonton, Canada, A&B Rail is a full service railroad company specializing in track construction, railway maintenance, light rail transit and signals and communication. The company was founded in 1965 and has offices across Canada. Fulcrum is a leading private investment management firm providing flexible private equity and mezzanine financing to Canadian middle market companies. The firm manages two private equity funds with $350 million in committed capital and a mezzanine finance business in excess of $400 million in committed capital.



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March 2014

Rail Renaissance with

Rick Webb, CEO Watco Companies

Watco Companies provides transportation, mechanical, port, and compliance solutions to customers in North America and Australia. It offers rail equipment leasing, sales, services and repair. In addition to providing rail equipment solutions, Watco Companies provide rail logistics services, including train planning and scheduling, tracing, maintenance, and inventory control. The Company also offers warehousing and distribution services. Watco Companies, LLC was founded in 1983 and is headquartered in Pittsburgh, Kansas.

HW&Co. – Watco has a highly diversified service offering that includes a network of short line railroads as well as other services such as switching, railcar repair, terminal and mechanical services, and others. What have been the main drivers of the Company’s service expansion and what services do you view as having the greatest opportunity for growth over the next few years? Rick Webb (RW) – Our customers’ supply chain needs are always the key drivers of our service offerings. We start by listening to the customer to gain a better understanding of their transportation needs. Then we craft a service plan that must improve the efficiencies of their supply chain in order to earn the right to grow with them. By taking this holistic approach to our customers’ needs we can’t predict with any degree of accuracy where the growth opportunities may arise. We have to stay close enough to the customer to be where they need us. HW&Co. – Are there any additional service offerings on your priority list? (RW) – Yes, we are looking at starting an “asset light” supply chain service that some people would call a logistics type service. We believe there are opportunities in this space that will complement our “asset heavy” rail transportation services.

Biography Chief Executive Officer since 1998, Rick’s primary responsibility has been the growth and strategic direction of Watco. Prior to becoming CEO, Rick learned the business by working alongside his father Dick Webb, founder of Watco. Rick held various management and leadership positions within Watco, including operations, purchasing, marketing, accounting and financial management.

An active participant in efforts to improve rail transportation for customers, Rick serves on the Board of Directors for both the Association of American Railroads and National Industrial Transportation League. Rick is also a vigorous supporter of his community and advocates for Pittsburg State University and many local schools and community organizations. He is member of the Pittsburg State University Foundation Board of Trustees, Community National Bank (CNB) Advisory Board of Directors and U.S. Bank’s Market Board of Directors. Rick earned a Bachelor of Science Degree in Physics from Pittsburg State University.

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March 2014


Rick Webb, CEO The Watco Companies

HW&Co. – There’s no question that rail (operators and service providers) remains among the hottest sectors from an M&A perspective – both strategic and private equity interest abounds. What are your thoughts on what is creating such great interest in the sector? (RW) – Rail is uniquely positioned to capture a bigger portion of the transportation market as our economy grows. The trucking industry is facing some challenges that include congestion, driver shortages, and fuel costs that may make it difficult for them to continue to hold their current market share let alone capture additional market share into the future. The marine shipping industry has excess capacity but is limited in what markets it can serve. Because of this unique position in the surface transportation industry, rail looks very attractive long term. HW&Co. – Do you foresee any changes in the way the sector is viewed from an M&A perspective? (RW) – Not at this time, but one thing is constant in our business – change. My opinions are just that, and provide no guarantee of accuracy. HW&Co. – The sharp increase in U.S. crude oil production and correlated rail transportation of that crude has clearly been a boon for the railroads. In 2013, railroads moved more crude oil than ever before (nearly twice as much as in 2012 – the previous high watermark). Given Watco’s service offering and network, we imagine you have been a benefactor of this trend. How do you think about the crude-by-rail trend playing out into the future? (RW) – We believe rail’s service offering to the oil and gas industry has a bright future, provided we do three things. First, we must work to improve our railroad operations to minimize the potential for future accidents. Second, we must work with our customers to reduce the product risk by ensuring the commodity being shipped is loaded into the right type of rail car. And third, we must improve the design of the tank car – not because it has caused any of the accidents of late, but to better protect the commodity and reduce any negative effects that might come from an accident. The rail industry and its customers need to come together with the right solution so we can gain the support of our government regulators. We believe this will get done. HW&Co. – With a number of those accidents you alluded to above occurring over the last year or two, railroad safety is a renewed topic of conversation among industry constituents – operators, service providers, municipalities, and regulators. What are you hearing in the industry regarding safety and how is it shaping, or reshaping, Watco’s safety practices? (RW) – As I mentioned earlier, improving railroad operations, especially in light of the additional crude oil that is moving by rail, is important to our industry, our customers, and the communities where we operate. I wouldn’t say we are reshaping our safety practices. Instead, I would say we are using this situation to improve awareness of the risks associated in our business and re-emphasizing the importance of safety. Our customers and communities expect us to be safe, and we are working hard every day to satisfy that important expectation.

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March 2014


Rick Webb, CEO The Watco Companies

HW&Co. – Given the size of the Class I railroads, which presents a significant hurdle in effecting a change of control transaction (save for Warren Buffet and Berkshire Hathaway of course), there has been tremendous investment in short line and regional rails over the prior several years – Genesee & Wyoming’s purchase of Rail America, the purchase of MM&A Railway by Fortress, among others. In your estimation, what are the key drivers of value of a short line, or any rail related asset for that matter? (RW) – The most important value driver is cash flow return on invested capital. We use that key metric in all of our acquisition decisions. I don’t think this will be much of a surprise due to the asset intensive nature of our industry. The other key value driver we focus on is the longevity of the customer base we are serving with a new or existing rail asset. After all, we are just service providers that happen to use some pretty cool assets to take care of our customers. If we have a good customer base and provide the kind of value creating service they are seeking, while using the right amount of assets, we will win in the long term. HW&Co. – Lastly, which team, in your expert baseball opinion, is likely to have a better year in 2014 – the Royals or the Cardinals? (RW) – It was great to see the improvement we saw last year from the Royals, but there is only one true answer to your question, Go Redbirds!!

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March 2014

What We’re Reading

Congress moving towards mileage tax, rather than additional fuel tax, to fund infrastructure construction and repair – the Commercial Carrier Journal reports the Chairman of the House’s Transportation and Infrastructure Committee, Bill Shuster, has proposed a tax based on mileage to fund improvement in U.S. infrastructure. Trucking groups, including the ATA, have supported a fuel tax, believing the administration of a mileage tax would create privacy issues and increased costs. Crude by barge continues to surge as sea and inland operations supplement rail and pipelines

through the oil boom – The Wall Street Journal reports growth in the North American oil and energy market is leading energy companies to the barge industry for support in transporting increased volumes. Oil transport by barge along the Mississippi this year is roughly 13 times that of 2010. Kirby President David Grzebinski expects transport on the east and west coasts of the country to follow similar trends. Despite serving an estimated 80% of Fortune 500 companies, third party logistics operations still

have room for significant growth – a recent article in the Journal of Commerce suggests 3PLs continue to transform from singular service providers to comprehensive suite providers, coordinating clients’ entire supply chain. As supply chains grow increasingly complex, clients are trusting their 3PLs to consult on all aspects of supply chain management. Strong growth in intermodal volume in Q4 caps an impressive year – Progressive Railroading reports

9.4% growth in domestic container volume, leading to a notable 4.6% year-over-year growth in intermodal shipments in 2013. The best improvement in intermodal traffic in years is largely attributable to the continued transition away from “over-the-road-transport. ”

Select Recent Transportation &

Logistics M&A

Date Acquirer Target Sector Target Description3/14/14 Roadrunner Transportation Unitrans Logistics Provides specialized freight forwarding services for pharmaceutical,

energy, and other specialized end markets.3/12/14 Lineage Logistics, LLC Millard Refrigerated Services Logistics Provides refrigeration and logistic services to food manufacturing, retail,

and food distribution companies.3/6/14 Endeavour Capital Port Logistics Group Logistics Provides gateway logistics services.

3/6/14 Wind Point Partners Dicom Express Logistics Provides door-to-door overnight package and less than truck load services to various destinations in Canada.

2/24/14 Roadrunner Transportation Rich Logistics Trucking Operates as a trucking company that provides logistics services.

2/12/14 United Parcel Service of America, Inc.`

Polar Speed, Inc. Logistics Provides temperature controlled distribution services to the pharmaceutical industry in Europe.

2/11/14 Goldman Sachs Private Equity

Odyssey Logistics & Technology Corporation

Logistics Provides logistics management services in the United States and internationally.

1/23/14 Forward Air Corp. Central States Trucking and Logistics

Logistics Offers supply-chain trucking and warehousing services.

1/8/14 The Halifax Group Golden State Overnight Delivery Service Inc.

Logistics Provides ground and priority overnight delivery services.

1/6/14 XPO Logistics Pacer International Logistics Provides asset-light transportation and logistics services worldwide.

1/6/14 Sterling Partners Innotrac Corp. Logistics Provides order processing, order fulfillment, and customer support contact center services.

1/2/14 Genessee & Wyoming, Inc. Dakota, Minnesota, & Eastern Railroad, West End Ops

Rail and Rail Services Operates regional railroads in United States.

12/13/13 United Road Services Inc. The Waggoners Trucking, Auto Transport Division

Trucking Provides transportation auto transportation services to automobile manufacturers.

12/12/13 Sumitomo Mitsui Flagship Rail Rail and Rail Services Operates as a rolling stock lessor that provides rail leasing solutions

12/12/13 Littlejohn & Co. Newgistics, Inc. Logistics Provides parcel and freight transportation solutions to a variety of end market customers.

12/12/13 TorQuest Partners A & B Rail Services Ltd. Rail and Rail Services Provides railway construction services in western Canada.

12/11/13 NLM XPO Logistics Logistics Provides transportation and logistics services.

12/2/13 Ingram Micro Shipwire, Inc. Logistics Provides cloud-based logistics services, shipping software solutions, and outsourced solutions.

11/15/13 Kenan Advantage Group RTL Westcan Group of Companies

Trucking Provides dry and liquid bulk transportation services.

11/11/13 Heartland Express, Inc. Gordon Trucking, Inc. Trucking Provides truckload transportation services in the United States and Canada.

http://www.ccjdigital.com/

http://online.wsj.com/

http://www.joc.com/

http://www.progressiverailroading.com/

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March 2014

Stock Performance Overview

Source: Capital IQ

Trailing Three Year Stock Price Performance

(80.0%)

(40.0%)

0.0%

40.0%

80.0%

Logistics Providers Marine Rail and Rail Services Transportation Equipment Trucking S&P 500 Index

Key Trading Statistics Stock Price % Change TEV / EBITDA P/E 1 Month 12 Month Mar-13 Sep-13 Current 2014E 2014E

Category

Logistics Providers 0.5% 14.7% 10.6x 10.5x 10.9x 9.4x 18.3xMarine 0.4% 15.4% 11.0x 11.9x 11.3x 10.1x 13.6xRail and Rail Services 3.5% 25.1% 8.1x 9.1x 10.2x 8.7x 16.5xTrucking Providers 6.9% 49.8% 6.1x 7.4x 8.7x 6.6x 18.6xTransportation Equipment 2.5% 16.4% 10.6x 11.1x 12.5x 8.9x 18.3x

TEV / LTM EBITDA as of

Current Valuations Versus Historical Three-Year Average

(Current TEV/LTM EBITDA multiple as a % of Three-Year Average)

138%124%

116% 115%

99%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Marine Trucking Providers Transportation Equipment

Rail and Rail Services Logistics Providers

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March 2014

Trading Statistics Detail

Price at 52 Week As a % of 52 Week As a % of Market Cash & Net EV/ EV/ Price/ LTM EBITDA Total Debt/ Net Debt/

($ in millions, except per share data) Ticker 3/13/14 High 52-wk High Low 52-wk Low Cap Debt Equiv. Debt EV LTM EBITDA 2014E EBITDA 2014E EPS Margin LTM EBITDA LTM EBITDA

Logistics ProvidersAgility Public Warehousing Company KSC KWSE:AGLTY $2.35 $2.64 88.8% $1.83 128.3% $2,447 $256 $501 ($245) $2,203 7.2x 6.0x 11.3x 6.1% 0.8x 0.0xAir Transport Services Group, Inc. Nasdaq:ATSG 7.41 8.20 90.4% 5.23 141.7% 479 387 17 370 849 5.4x 4.9x 10.4x 27.2% 2.5x 2.3xAtlas Air Worldwide Holdings Inc. Nasdaq:AAWW 31.97 50.98 62.7% 29.81 107.2% 800 1,697 333 1,364 2,164 7.0x 7.4x 10.0x 18.6% 5.5x 4.4xCH Robinson Worldwide Inc. Nasdaq:CHRW 52.08 62.46 83.4% 51.32 101.5% 7,732 875 162 713 8,445 11.6x 11.3x 18.7x 5.7% 1.2x 1.0xDeutsche Post AG XTRA:DPW 34.49 37.91 91.0% 23.80 144.9% 41,694 8,180 3,118 5,062 46,756 9.9x 7.6x 16.3x 6.2% 1.7x 1.1xDSV A/S CPSE:DSV 31.33 34.85 89.9% 24.59 127.4% 5,477 1,229 131 1,098 6,575 12.1x 11.4x 16.1x 6.4% 2.3x 2.0xEcho Global Logistics, Inc. Nasdaq:ECHO 17.26 22.65 76.2% 15.54 111.1% 406 0 53 (53) 353 12.8x 9.4x 23.7x 3.1% 0.0x 0.0xExpeditors International of Washington Inc. Nasdaq:EXPD 39.78 46.90 84.8% 34.83 114.2% 8,061 0 1,274 (1,274) 6,787 11.3x 9.8x 20.0x 9.9% 0.0x 0.0xFedEx Corporation NYSE:FDX 136.68 144.39 94.7% 90.61 150.8% 42,675 2,990 3,935 (945) 41,730 7.1x 6.7x 18.9x 13.1% 0.5x 0.0xForward Air Corp. Nasdaq:FWRD 44.77 46.66 95.9% 35.93 124.6% 1,375 0 127 (127) 1,248 11.6x 9.1x 20.1x 16.4% 0.0x 0.0xHub Group Inc. Nasdaq:HUBG 40.87 43.09 94.8% 34.50 118.5% 1,531 29 69 (40) 1,492 10.8x 10.9x 18.9x 4.1% 0.2x 0.0xJB Hunt Transport Services Inc. Nasdaq:JBHT 71.90 79.89 90.0% 67.97 105.8% 8,430 708 6 703 9,133 11.0x 9.7x 21.6x 14.9% 0.9x 0.8xKuehne + Nagel International AG SWX:KNIN 138.13 146.96 94.0% 112.91 122.3% 16,567 51 1,112 (1,062) 15,505 14.5x 13.1x 22.2x 5.5% 0.0x 0.0xLandstar System Inc. Nasdaq:LSTR 60.23 61.92 97.3% 50.39 119.5% 2,740 129 215 (86) 2,654 13.2x 11.4x 20.9x 7.5% 0.6x 0.0xPacer International, Inc. Nasdaq:PACR 8.96 9.23 97.1% 4.55 197.1% 317 0 46 (46) 271 11.1x 8.6x 22.3x 2.5% 0.0x 0.0xPanalpina World Transport Holding Ltd. SWX:PWTN 158.88 178.25 89.1% 94.00 169.0% 3,768 4 373 (369) 3,399 NM 14.5x NM 2.1% 0.0x 0.0xRoadrunner Transportation Systems, Inc. NYSE:RRTS 24.75 30.98 79.9% 21.17 116.9% 930 194 5 188 1,118 10.1x 9.0x 15.2x 8.2% 1.7x 1.7xRyder System, Inc. NYSE:R 76.54 78.78 97.2% 52.58 145.6% 4,061 4,189 62 4,128 8,189 5.6x 5.2x 13.5x 22.8% 2.9x 2.8xTransForce Inc. TSX:TFI 21.16 23.40 90.4% 16.50 128.2% 1,976 738 0 738 2,714 8.6x 7.1x 12.7x 10.8% 2.3x 2.3xUnited Parcel Service, Inc. NYSE:UPS 97.10 105.37 92.2% 81.95 118.5% 89,614 10,980 6,664 4,316 93,930 10.6x 9.6x 18.3x 16.0% 1.2x 0.5xUniversal Truckload Services Inc. Nasdaq:UACL 28.39 34.07 83.3% 19.30 147.1% 854 242 22 220 1,074 10.2x 8.7x 13.7x 10.2% 2.3x 2.1xUTi Worldwide Inc. Nasdaq:UTIW 11.72 17.70 66.2% 9.34 125.5% 1,228 461 171 289 1,517 15.6x 12.0x NM 2.2% 4.7x 3.0xWorld Fuel Services Corp. NYSE:INT 43.82 45.89 95.5% 34.57 126.8% 3,150 464 292 172 3,322 11.0x 9.9x 14.5x 0.7% 1.5x 0.6x

Mean 10.4x 9.3x 17.1x 9.6% 1.4x 1.1xMedian 10.9x 9.4x 18.3x 7.5% 1.2x 0.6x

TruckingArkansas Best Corporation NasdaqGS:ABFS $35.59 $37.61 94.6% $9.62 369.9% $921 $126 $141 ($15) $906 8.7x 5.3x 16.7x 4.5% 1.2x 0.0xCeladon Group Inc. NYSE:CGI 23.91 24.67 96.9% 16.29 146.8% 557 355 15 340 897 8.6x 8.2x 20.8x 15.3% 3.4x 3.3xCon-way Inc. NYSE:CNW 39.84 46.52 85.6% 31.18 127.8% 2,268 757 0 757 3,024 7.1x 6.0x 17.4x 7.8% 1.8x 1.8xCovenant Transportation Group, Inc. NasdaqGS:CVTI 11.01 12.29 89.6% 4.85 227.0% 164 197 11 187 350 5.5x 4.8x 20.9x 9.3% 3.1x 2.9xHeartland Express, Inc. NasdaqGS:HTLD 21.92 22.42 97.8% 12.99 168.7% 1,922 75 18 57 1,980 13.3x 8.2x 20.9x 25.5% 0.5x 0.4xKnight Transportation Inc. NYSE:KNX 22.61 22.73 99.5% 15.02 150.5% 1,823 38 1 37 1,860 9.7x 8.5x 22.3x 19.9% 0.2x 0.2xMarten Transport Ltd. NasdaqGS:MRTN 20.28 21.47 94.5% 12.33 164.4% 676 0 14 (14) 662 6.0x 5.1x 17.6x 16.8% 0.0x 0.0xOld Dominion Freight Line Inc. NasdaqGS:ODFL 55.92 57.00 98.1% 35.17 159.0% 4,818 191 30 161 4,980 10.8x 9.3x 19.3x 19.7% 0.4x 0.4xP.A.M. Transportation Services, Inc. NasdaqGM:PTSI 22.19 23.00 96.5% 8.85 250.7% 177 107 20 87 264 5.3x 4.8x 19.9x 12.4% 2.1x 1.7xQuality Distribution Inc. NasdaqGM:QLTY 13.18 15.07 87.5% 7.01 188.0% 361 383 2 381 742 10.2x 7.6x 14.2x 7.8% 5.3x 5.3xSaia, Inc. NasdaqGS:SAIA 38.80 40.68 95.4% 21.91 177.1% 942 77 0 77 1,019 8.1x 6.6x 16.0x 11.1% 0.6x 0.6xSwift Transportation Company NYSE:SWFT 25.30 26.71 94.7% 12.75 198.4% 3,565 1,615 59 1,555 5,120 8.9x 7.7x 17.9x 14.0% 2.8x 2.7xUniversal Truckload Services Inc. NasdaqGS:UACL 28.39 34.07 83.3% 19.30 147.1% 854 242 22 220 1,074 10.2x 8.7x 13.7x 10.2% 2.3x 2.1xUSA Truck Inc. NasdaqGS:USAK 14.83 16.38 90.5% 4.37 339.4% 156 142 0 142 299 7.4x 5.8x NM 7.2% 3.5x 3.5xVitran Corp Inc. TSX:VTN 6.56 6.56 100.0% 3.61 181.7% 108 49 26 23 131 NM 12.1x NM NM NM 0.0xWerner Enterprises Inc. NasdaqGS:WERN 25.74 26.87 95.8% 21.80 118.1% 1,875 40 24 16 1,891 6.4x 5.5x 19.6x 14.6% 0.1x 0.1xYRC Worldwide Inc. NasdaqGS:YRCW 22.39 36.99 60.5% 6.69 334.7% 647 1,363 171 1,193 1,840 9.0x 6.2x NM 4.2% 6.7x 5.8x


Rail and Rail ServicesAmerican Railcar Industries, Inc. NasdaqGS:ARII $70.77 $77.5 91.3% $29.9 237.0% $1,511 $195 $97 $98 $1,609 9.0x 8.0x 13.6x 23.8% 1.1x 0.5xCanadian National Railway Company TSX:CNR 56.56 57.59 98.2% 43.34 130.5% 46,941 7,380 201 7,178 54,119 11.8x 11.1x 17.7x 45.9% 1.6x 1.6xCanadian Pacific Railway Limited TSX:CP 154.77 159.80 96.9% 106.93 144.7% 27,191 4,590 448 4,142 31,332 14.3x 11.7x 20.2x 37.9% 2.1x 1.9xCSX Corp. NYSE:CSX 28.46 29.25 97.3% 22.40 127.1% 28,676 9,555 1,079 8,476 37,152 8.1x 7.8x 14.3x 38.1% 2.1x 1.9xFreightCar America Inc. NasdaqGS:RAIL 23.81 27.09 87.9% 16.53 144.0% 287 0 184 (184) 102 NM 4.2x NM NM 0.0x NMGenesee & Wyoming Inc. NYSE:GWR 97.32 102.20 95.2% 79.22 122.8% 5,216 1,627 63 1,564 6,780 12.7x 11.1x 21.5x 34.0% 3.1x 2.9xThe Greenbrier Companies, Inc. NYSE:GBX 45.89 47.15 97.3% 20.05 228.9% 1,283 411 81 330 1,613 10.2x 7.3x 14.9x 8.6% 2.6x 2.1xKansas City Southern NYSE:KSU 97.91 125.96 77.7% 88.56 110.6% 10,803 2,189 430 1,759 12,563 13.1x 11.6x 20.2x 40.6% 2.3x 1.8xNorfolk Southern Corporation NYSE:NSC 95.24 96.90 98.3% 70.27 135.5% 29,497 9,581 1,561 8,020 37,517 9.0x 8.2x 14.0x 37.1% 2.3x 1.9xTrinity Industries Inc. NYSE:TRN 71.65 74.66 96.0% 34.57 207.3% 5,552 3,014 578 2,435 7,987 8.3x 6.4x 10.0x 22.1% 3.1x 2.5xUnion Pacific Corporation NYSE:UNP 185.86 189.46 98.1% 135.75 136.9% 84,577 9,577 1,432 8,145 92,722 10.1x 9.1x 16.5x 42.0% 1.0x 0.9xWabtec Corporation NYSE:WAB 80.40 81.70 98.4% 48.04 167.4% 7,718 451 286 165 7,883 16.1x 13.8x 22.8x 19.0% 0.9x 0.3x


MarineAegean Marine Petroleum Network Inc. NYSE:ANW 9.91 12.72 77.9% 5.74 172.6% 468 784 72 711 1,180 14.1x 10.3x 10.3x 1.3% 9.4x 8.5xCostamare Inc. NYSE:CMRE 20.49 21.66 94.6% 13.01 157.5% 1,533 1,971 93 1,877 3,410 13.2x 10.1x 11.2x 62.4% 7.6x 7.3xDiana Shipping Inc. NYSE:DSX 12.46 13.93 89.4% 8.38 148.7% 1,032 448 241 207 1,239 NM 19.7x NM 31.7% 8.6x 4.0xKirby Corporation NYSE:KEX 102.39 106.93 95.8% 71.44 143.3% 5,829 749 6 743 6,572 11.3x 10.2x 20.6x 25.9% 1.3x 1.3xMatson, Inc. NYSE:MATX 24.76 29.47 84.0% 21.51 115.1% 1,063 286 115 172 1,235 7.2x 6.3x 15.9x 10.5% 1.7x 1.0xNeptune Orient Lines Ltd. SGX:N03 0.79 0.96 81.6% 0.74 105.9% 2,032 4,931 1,005 3,927 5,959 NM 11.5x NM 1.4% 41.2x NMNordic American Tankers Limited NYSE:NAT 9.96 12.61 79.0% 7.00 142.3% 749 250 66 184 933 NM 17.1x NM NM NM 0.0xRand Logistics, Inc. NasdaqCM:RLOG 7.35 7.49 98.1% 4.66 157.7% 132 143 5 138 270 9.8x 8.6x NM 17.6% 5.2x 5.0xSEACOR Holdings Inc. NYSE:CKH 83.01 99.00 83.8% 69.78 119.0% 1,692 881 363 518 2,210 11.2x 7.7x 16.5x 15.8% 4.5x 2.6xWilh. Wilhelmsen ASA OB:WWASA 9.56 10.27 93.0% 7.23 132.3% 2,103 1,502 411 1,091 3,194 NM 6.4x 8.2x 47.4% 9.8x 7.1x


Transportation EquipmentAccuride Corp. NYSE:ACW $4.74 $6.88 68.9% $3.10 152.9% $225 $340 $28 $312 $537 12.5x 8.9x NM 6.7% 7.9x 7.2xDana Holding Corporation NYSE:DAN 21.42 23.46 91.3% 15.51 138.1% 3,171 1,624 1,366 258 3,429 4.9x 4.5x 11.1x 10.3% 2.3x 0.4xGentherm Incorporated NasdaqGS:THRM 32.40 33.21 97.6% 13.63 237.7% 1,140 100 36 64 1,203 14.5x 13.2x 21.8x 12.6% 1.2x 0.8xSpartan Motors Inc. NasdaqGS:SPAR 5.37 7.18 74.8% 4.90 109.6% 184 5 31 (25) 158 25.4x 9.6x NM 1.3% 0.9x 0.0xWabash National Corp. NYSE:WNC 13.42 14.06 95.4% 8.19 164.0% 920 371 113 257 1,177 8.3x 7.0x 14.9x 8.7% 2.6x 1.8x


11


March 2014

Recent HW&Co. T&L Transactions

Third-Party Logistics

Surface Transportation

Rail

Aviation

Marine

Transportation Equipment

Automotive

Our professionals have deep expertise across the spectrum of Transportation & Logistics sectors

Companies above represent select experience of Harris Williams & Co. professionals.



portfolio companies of

have completed a merger with




portfolio companies of

have been acquired by

anda portfolio company of



has been recapitalized by









&

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12


March 2014

Sources: •Capital IQ •Thomson Financial •S&P •Reuters

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Harris Williams & Co.’s Transportation & Logistics Group has industry-leading experience in a broad range of attractive niches, including third party logistics, surface transportation, airport and aviation services, marine transportation, automotive and heavy duty vehicles, transportation equipment, and transportation infrastructure. Our middle market leadership and sell-side execution excellence deliver unmatched results for our clients. For more information, contact one of our professionals.

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