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Schneider National (SNDR) Buys Midwest Logistics in $263M Deal

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Schneider National (SNDR - Free Report) has acquired 100% equity interest in Ohio-based truckload carrier, Midwest Logistics Systems (“MLS”). The transaction, valued at approximately $263 million, was financed through cash on hand.

The buyout expands Schneider National’s dedicated operations, adding more than 1,000 professional drivers and 900 tractors. With this acquisition, management feels confident of the company’s ability to generate $1 billion in annual revenues for its dedicated operations. SNDR expects the transaction to be immediately accretive to its earnings per share.

MLS will operate as an independent subsidiary of Schneider National while its professional drivers and associates will continue working under the MLS name. SNDR will report financial results of MLS as part of its dedicated operations under the Truckload segment from first-quarter 2022 onward. MLS generated annual revenues of approximately $205 million for the 12-month period ended Sep 30, 2021.

Regarding the MLS acquisition, Schneider National’s president and CEO, Mark Rourke, said, “The carrier’s family-owned nature combined with its strong culture and customer service make it a valuable contributor for growing Schneider’s dedicated operations.”

Schneider National’s move to expand its Truckload segment (primary revenue generator) is prudent, given the strength in its operations owing to upbeat freight demand. The company’s top line increased 23% year over year in the first nine months of 2021 owing to higher revenues across the Truckload, Intermodal and Logistics segments.

Zacks Rank & Other Key Picks

Schneider National carries a Zacks Rank #2 (Buy). Some other top-ranked stocks within the broader Transportation sector are as follows:

ArcBest Corporation (ARCB - Free Report) flaunts a Zacks Rank #1 (Strong Buy). The company has a stellar earnings surprise history. It has outperformed the Zacks Consensus Estimate for earnings in each of the preceding four quarters, the average surprise being 27.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of ArcBest have surged more than 100% in a year’s time.

Expeditors International of Washington (EXPD - Free Report) carries a Zacks Rank #1. The company’s earnings have outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 29.1%.

Shares of Expeditors have appreciated more than 38% in a year’s time.

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