Former Saia CEO targets roll-up and IPO of auto transport firms

A former Saia Inc. CEO, backed by some big-fleet board members, is looking to acquire five regional autohaulers via a public offering that, if successful, will create a company that last year booked $415 million in sales.

Proficient Auto Logistics Inc. was formed last June and is headquartered in Jacksonville. To be led by CEO Richard O’Dell, who led Saia from late 2006 until four years ago and is still non-executive chairman of its board, the company plans to pay a total of $180 million and a to-be-determined amount of Proficient stock for the following companies:

Proficient Auto Transport Inc. in Jacksonville, which was founded in 1993 and which last year generated sales of $136 million and net income of $7.2 million. The company runs nine facilities in five states and does most of its work in the South and Southeast as well as along the East Coast.
Deluxe Auto Carriers Inc., a West Coast-focused firm that had 2023 profit of $1.4 million on revenues of $94.7 million. Founded in 2004 and based near Los Angeles, it has begun to build a cross-border business in Texas and now has 16 facilities in five states that handle about 600,000 cars annually.
California-based Sierra Mountain Group Inc., which produced a profit of $4.0 million on $74.6 million in sales last year. Launched in 1988 and active on the West Coast and in the Midwest, it has 18 facilities in 10 states.
Delta Automotive Services Inc. in New Jersey, which produced a net income of $3.7 million on total revenues of $55.1 million in 2023. The company moved about 164,000 units in 2023. It was founded in 1999, runs four facilities, and primarily does business along the East Coast and in the Southeast.
Tribeca Automotive Inc., another New Jersey-based company, which rang up $54.8 million in 2023 sales and $4.4 million in profits. Last year, its teams moved a little more than 300,000 units, an increase of 15% from 2022. The company has grown to four facilities since its launch in 2010 and primarily does business along the East Coast and in the Southeast.

Combined, the five firms’ revenues have climbed from $259 million in 2020 to $415 million last year as the number of vehicles they delivered rose from about 1.7 million to nearly 2 million. O’Dell and his team expect that number will grow in coming years as auto sales continue to climb toward their pre-pandemic levels.

Proficient Auto Logistics was founded by veteran investment managers Ross Berner and Mark McKinney, who in the late 1990s were co-chief acquisition officers of fellow auto hauler United Road Services Inc. That Michigan-based company is the market leader with nearly 2,000 trucks but last summer, after six years under the umbrella of private-equity titan Carlyle Group, went through a financial restructuring.

If completed as envisioned by Berner and McKinney, their acquisition plans will give Proficient Auto Logistics about 650 employees, a fleet of about 1,130 trucks with an average age of about 5.8 years, and a portfolio of 49 leased terminals. Its fleet size would, according to the company’s IPO filing, place it third in the auto transportation space, behind United Road and Jack Cooper but ahead of Hansen & Adkins and Cassens Transport.

The combined enterprise would have 17 of the world’s 18 largest automakers as clients, with General Motors Corp. (nearly 26% of 2023 sales) by far the largest.

More deals, cross-selling, integration among post-IPO strategies

Randy Beggs, who has led Proficient Transport since 2018, will also become the holding company’s president and COO once the proposed deals have been closed. Teed up to be CFO is Brad Wright, who until recently was finance chief of the parent company of warranty services firm Protect My Car and who, among other things, was CFO of investment bank Friedman Billings Ramsey’s holding company.

Merging the operations of the five component companies will be a priority—as well as a notable risk—for the new Proficient, executives said in a recent filing with the U.S. Securities and Exchange Commission. Other growth strategies include other acquisitions, cross-selling services and growing the company’s businesses with key customers looking for more options.

“For example, there is an opportunity to further expand our operations of regional auto storage yards on behalf of major automotive OEMs, which we believe will lead to future revenue opportunities,” the executives’ filing reads. “We believe that our expanded scale and other resources will permit us to acquire new customers that require greater auto transportation and logistics capacity and storage capabilities than those possessed by smaller operators.”

O’Dell, Beggs and their team also expect that merging the five smaller companies into a larger enterprise will give them more opportunities to book business for company-owned tractors and trailers. In 2023, they noted, 34% of Proficient’s pro forma sales came from company-operated vehicles.

In addition to O’Dell, Proficient Auto Logistics has another Saia leadership link in Douglas Col, the carrier’s CFO who will become a member of the company’s board of directors upon its IPO. Also among those slated to join the board: Landstar System Inc. President and CEO Jim Gattoni.

If Proficient’s IPO is successful, its shares will be listed on the Nasdaq Global Market under the symbol PAL.