Saltchuk Resources is a diversified transportation and logistics family of companies, headquartered in Seattle, WA. In 2011, it decided to make a foray away from its largely marine-based transport business and bought a long-haul trucking company: Interstate Distributors (IDC). While the business was viable under Saltchuk’s ownership, there were fewer synergistic opportunities with the other companies under Saltchuk’s umbrella than originally envisioned, and Saltchuk’s management realized it would be very difficult to reach the scale necessary to get the desired value out of IDC’s assets. As a result, Saltchuk came to us in 2016 to ask if we could help sell IDC. It was evident that in the very competitive trucking business, there would be a buyer; but the question was how to gain the most value from a marginally performing business with no transferable franchise? 

What we learned was that IDC was viewed by its competitors as a collection of drivers and vehicles—assets that could be purchased and put to work in another system, instead of a valuable stand-alone system itself. The one outlier was Heartland Express, because of its recent acquisition of Gordon Brothers Trucking. Gordon Brothers was larger than was IDC and had most of its route lanes north-south in the western US. As a result, it vied for route miles with IDC in the same lanes. Heartland realized the potential of combining Gordon’s and IDC’s capacity to more efficiently service those key north-south Western US lanes. There were numerous opportunities to consolidate service centers to increase their efficiency, as well. In addition to the real combination synergies from the two businesses, we believed that Heartland feared that another larger competitor might step into IDC’s position and add more competitive pressure to Heartland’s strategically critical lanes. 

The result was a sale transaction that gave Saltchuk a better-than-expected result. In return, we surmised that Heartland earned the opportunity to strengthen its Western US service business.   Working closely with the Saltchuk executive team was a catalyst to show our team’s creativity and strategic thinking as it applied to business combinations, which has led to other valued opportunities to advise on acquisitions and complex situations.