www.harriswilliams.com Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. TRANSPORTATION & LOGISTICS INDUSTRY UPDATE | FEBRUARY 2018
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INDUSTRY UPDATE | FEBRUARY 2018 · PUBLIC MARKETS OVERVIEW ... 2/8/2018 Logistics Globegistics, Inc. Provides courier services including eCommerce Shipping Services, Domestic Parcel
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www.harriswilliams.com
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limitedcompany incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England andWales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which HarrisWilliams LLC and Harris Williams & Co. Ltd conduct business.
Jeffery PerkinsManaging Director [email protected]+49 (0) 69 3650638 00
TRANSPORTATION & LOGISTICS
INDUSTRY UPDATE │ FEBRUARY 2018
WHAT WE’RE READING
RAIL | INTERMODAL OUTPACES WEEKLY CARLOADS
Total carloads slid to 251,058 carloads, down 0.5%, while intermodal volume was268,487 containers and trailers, up 3.7% on-year, AAR reported. Seven of the 10carload commodity groups posted an increase compared with the same week in2017. They included nonmetallic minerals, 6.9%; chemicals, 4%, and metallic oresand metals, 5.2%. Commodity groups declining were coal, 4.2%; motor vehiclesand parts, 10.6%, and grain, 7%. North American rail volume for the week on 12reporting U.S., Canadian and Mexican railroads totaled 344,660 carloads, off 1.6%from the 2017 week, and 348,177 intermodal units, up 2.8%. Total traffic was692,837 carloads and intermodal units, up 0.6%.
Railway Age
LOGISTICS | "INTERNET OF THINGS” IS CHANGING THE SUPPLY CHAINLANDSCAPE
In 2018, manufacturers will ramp up digital transformation to embrace newtechnologies that have the potential to change the supply chain landscape. In2018, companies will augment their ability to understand the condition of aproduct as it’s in-transit, instead of having to rely on testing upon arrival. This levelof transparency will enable companies to verify product condition during theentire trip from beginning to end. Across the logistics landscape, enterprises willderive very clear ROI as they continue to experiment with and develop bestpractices for the industrial Internet of Things.
Material Handling & Logistics
TRUCKING | TRUCKING COMPANIES ORDERED MOST BIG RIGS IN 12 YEARS
Trucking companies ordered the most new big rigs in nearly 12 years, as theyhustled to take advantage of one of the hottest freight markets. A nationwideshortage of available trucks has sent shipping costs soaring, with retailers andmanufacturers in some cases paying over 30% above typical rates to book last-minute transportation for cargo. Trucking companies, buoyed by strong demandand flush with cash following the recent tax overhaul, are accelerating plans toreplace or expand their fleets. The arrival of more trucks could stabilize the freightmarket, helping shippers. But relief could be months away. Many trucks ordered inJanuary won’t be delivered until the second half of the year, and fleets arehaving trouble recruiting enough drivers to fill seats in their existing big rigs.
WSJ
AIR | DEMAND IN GLOBAL AIR CARGO SUPPLY CHAIN REMAINS “ROBUST”
IATA reported that global air freight markets global demand grew by 9.0%. Thiswas more than double the 3.6% annual growth recorded in 2016. Meanwhile,freight capacity, rose by 3.0% in 2017. This was the slowest annual capacity growthseen since 2012.
Logistics Management
MARINE | PANJIVA POINTS TO STRONG IMPORT GROWTH TO START 2018
According to Panjiva, the U.S.-bound waterborne shipment activity had a strongstart to the year in January, up 7.7% annually compared to 934,447 in January2017. Panjiva said this marks the fastest rate of growth in a month going back toApril 2017, as well as outpacing the cumulative 4.1% growth rate for all of 2017,which it noted was a record year for U.S.-bound shipments in aggregate. Panjivapointed to a number of growth drivers for this ongoing stretch of growth, includingAmerican business confidence remaining high after the recently passed taxreform bill, which it said is leading suppliers to expect an increase in investment.
2/12/2018 Logistics DWS Logistics, Inc. Prov ides freight logistics serv ices Mullen Group Ltd.
2/9/2018 Logistics Thermo-Transit Danmark
A/S
Prov ides transportation serv ices Girteka Logistics UAB
2/8/2018 Logistics Globegistics, Inc. Prov ides courier serv ices including eCommerce Shipping Serv ices,
Domestic Parcel Serv ices, Royal Mail, International Courier and Air
Freight
Asendia Management SAS
2/5/2018 Marine Gill North America Ltd. Prov ides marine related serv ices YFM Private Equity Ltd.;
Douglas Gill International
Ltd.
2/5/2018 Rail GREX Manufactures cutting-edge equipment to the railroad industry Loram
2/5/2018 Marine Omni Packaging Corp. Distributes shipping and packaging materials to businesses
throughout the United States
Meridian Venture Partners
LLC; SupplyOne, Inc.;
Stephens Capital Partners
LLC2/4/2018 Marine Higman Marine, Inc. Prov ides inland marine transportation serv ices for bulk liquid
petroleum and chemical cargoes
Kirby Corp.
2/2/2018 Trucking Fore Transportation, Inc. Prov ides long-haul intermodal and truckload serv ices Mason Dixon Intermodal,
Inc.
1/31/2018 Logistics Al's Water Serv ice, Inc. Prov ides potable water transportation and serv ices tothe oil, gas,
and mining industries
Stallion Oilfield Serv ices
Ltd.
1/27/2018 Trucking "Euroterminal Slawków"
Sp zoo
Provides transportation logistics serv ices Government of Poland;
PKP Linia Hutnicza
Szerokotorowa Sp zoo
1/22/2018 Logistics Groome Holdings Prov ides specialty transportation serv ices, operating in both the
airport shuttle and closed-loop campus shuttle markets
Cortec Group
1/21/2018 Logistics Rossendale Transport Prov ides bus transportation serv ices Transdev
1/19/2018 Rail Roadway Worker
Training
Provider of safety, compliance and technical training, targeted
serv ices, and v ideos for the railroad industry
RailPros
PAGE |
6.4x
7.6x
8.5x
10.4x
10.7x
Trucking
Transportation
Equipment
Marine
Logistics Providers
Rail & Rail Services
8.3x
8.4x
10.3x
11.5x
12.5x
Transportation
Equipment
Trucking
Marine
Rail & Rail Services
Logistics Providers
PUBLIC MARKETS OVERVIEW(1)
3
TRANSPORTATION & LOGISTICS
TEV / LTM EBITDA TEV / 2018E EBITDA
AVERAGE REVENUE GROWTH (2014 – 2017) AVERAGE REVENUE GROWTH (2017 – 2019P)
AVERAGE EBITDA GROWTH (2014 – 2017) AVERAGE EBITDA GROWTH (2017 – 2019P)
INDUSTRY UPDATE │ FEBRUARY 2018
(5.9%)
(4.1%)
(3.3%)
4.8%
9.9%
Trucking
Marine
Rail & Rail Services
Transportation Equipment
Logistics Providers
(5.7%)
2.0%
5.3%
9.0%
14.7%
Trucking
Logistics Providers
Rail & Rail Services
Transportation Equipment
Marine
(42.3%)
(6.9%)
(0.8%)
12.7%
12.7%
Marine
Trucking
Rail & Rail Services
Logistics Providers
Transportation
Equipment
3.4%
6.2%
7.4%
23.0%
25.3%
Trucking
Rail & Rail Services
Logistics Providers
Transportation
Equipment
Marine
PAGE |
STOCK PRICE PERFORMANCE(1)
4
TRANSPORTATION & LOGISTICS
(Indexed to February 26th, 2017)
TRAILING TWELVE MONTHS
MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH)
INDUSTRY UPDATE │ FEBRUARY 2018
(7.4%)
(6.4%)
(4.6%)
(4.4%)
(2.7%)
(0.9%)
Trucking
Marine
Logistics Providers
S&P 500
Rail & Rail Services
Transportation Equipment
0.8%
16.1%
17.0%
19.9%
29.6%
51.2%
Marine
S&P 500
Rail & Rail Services
Logistics Providers
Transportation
Equipment
Trucking
(40%)
(30%)
(20%)
(10%)
0%
10%
20%
30%
40%
50%
60%
Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17
Logistics Providers Trucking Rail and Rail Services
Marine Transportation Equipment S&P 500 Index
PAGE |
OUR GROUP
Harris Williams & Co. is a leading advisor to the transportation and logistics M&A market. Our Transportation & LogisticsGroup serves companies in a broad range of attractive niches, including third-party logistics (3PL), truck, rail, marineand air transportation, transportation equipment, and the automotive and heavy duty vehicle market.
Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities.Our clients benefit from our deep-sector experience, integrated industry intelligence andcollaboration across the firm, and our commitment to learning what makes them unique. For moreinformation, visit our website at www.harriswilliams.com/industries
OUR FIRM
TRANSPORTATION & LOGISTICS
INDUSTRY UPDATE │ FEBRUARY 2018
6
PAGE |
PUBLIC COMPARABLES(1)
7
TRANSPORTATION & LOGISTICS
INDUSTRY UPDATE │ FEBRUARY 2018
Stock Performance
Stock Price Change from 52-Week TEV / EBITDA EBITDA
($ in millions except per share data) TEV Current Prior Month Prior Year High % of High Feb-17 Aug-17 Current 2018E 2019P
Transportation & Logistics
TEV / LTM EBITDA as of
Logistics Providers
Air Transport Services Group, Inc. 1,979 25.18 (2.1%) 47.9% 27.67 91.0% 7.6x 7.9x 8.8x 6.2x 5.6x
Atlas Air Worldwide Holdings, Inc. 3,575 63.95 6.9% 13.4% 68.70 93.1% 8.9x 9.7x 8.7x 7.0x 6.5x
Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co.Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK,registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulatedby the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conductbusiness.
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