What private equity investments in transportation and logistics could mean for you | RetailTechPodcast

What private equity investments in transportation and logistics could mean for you

A growing number of private equity firms are buying transportation and logistics companies. Private equity firms are moving into the transportation and logistics space in a big way. Other firms, such as Headhaul Capital Partners, Greenbriar Equity Group, and Supply Chain Equity Partners, also maintain a specific focus on the T&L space. What is driving this increased M&A activity in transportation and logistics? More importantly, what might this mean for the industry, and how might the customers and suppliers of these acquired T&L companies capitalize on this change? Private equity firms use a number of criteria to evaluate potential investments, and many prefer to invest in companies that have at least US$2 million in Earnings Before Interest, Tax, Depreciation, and Amortization. According to Seth Eliot Wilson, managing partner at Headhaul Capital Partners, PE firms are becoming more aware of "How integral T&L and supply chain companies are to the domestic and global economy. Nothing can get produced, manufactured, or sold without a supply chain." While this may be obvious to those within the industry, this is a key realization for PE firms as they create and develop their investment thesis. In an effort to accelerate growth within the holding period, PE-backed transportation and logistics companies will also often make acquisitions of their own, referred to as "Add-on" acquisitions, where the PE finds additional T&L companies that can be acquired and then simply added to the main "Platform" company. Read more