Knight-Swift strikes another LTL deal

Dec. 7, 2021

The Arizona-based carrier has paid $150M to couple a network in the Upper Midwest and Pacific Northwest to its AAA unit.

Geert De Lombaerde

Knight-Swift Transportation Holdings Inc. executives have taken the next step toward building a national less-than-truckload business by acquiring the parent company for Midwest Motor Express Inc. and Midnite Express Inc. for $150 million in cash.

Phoenix-based Knight-Swift earlier this year paid more than $1.3 billion for AAA Cooper Transportation, a move that gave it an LTL network in the Southeast and Midwest. RAC MME Holdings LLC, Knight-Swift’s fourth acquisition of 2021, adds to that more than 30 service centers with roughly 800 doors from Wisconsin to the Pacific Northwest. The move gives CEO Dave Jackson and his team an LTL operation that now covers more than half the country and accounts for about 14% of their revenues on a pro forma basis.

Knight-Swift plans to keep the MME brand, which also markets truckload and logistics services, and retain the company’s 800 employees. The acquisition, Jackson’s team said, will add to Knight-Swift’s profits in 2022 even before longer-term cost savings and revenue growth—the latter is expected to be in the low double digits by 2024—kicks in. MME is on track to generate $16 million in operating profit on revenue of $137 million this year from a fleet that makes up about 460 tractors and 930 trailers.

North Dakota-based MME had been owned since 2019 by investment firms Red Arts Capital, Prudential Capital Partners and Brightwood Capital Advisors as well as several family offices. That group had teamed to acquire the business from the Roswick and Greenstein families, who founded the company in 1918.

“With MME, we found the ideal opportunity to invest in an excellent business with an extensive network, including most metropolitan areas across its network geographic footprint,” said Nicholas Antoine, a co-founder and managing partner at Red Arts. “We are proud of our contributions to the company’s over 100 years of growth and service to the region, and believe that Knight-Swift provides MME the ideal home for its next phase of growth.”

Investors like the MME deal at first blush: Shares of Knight-Swift (Ticker: KNX) were up nearly 5% to about $60 in midday trading Dec. 6. The stock has climbed more than 25% in the past six months, growing Knight-Swift’s market capitalization to $10 billion.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications FleetOwner, Healthcare Innovation, IndustryWeek, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.