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Schneider National SNDR has acquired 100% of the stock in Ohio-based truckload carrier, Midwest Logistics Systems (“MLS”). The transaction, valued at approximately $263 million, was funded by available cash.
The acquisition expands Schneider National’s custom operations, adding more than 1,000 professional drivers and 900 tractors. With this acquisition, management feels confident in the company’s ability to generate $1 billion in annual revenue for its dedicated operations. SNDR expects the transaction to immediately become cumulative of its earnings per share.
MLS will operate as an independent subsidiary of Schneider National while its professional drivers and partners will continue to operate under the MLS name. SNDR will report financial results for MLS as part of its dedicated truck operations from the first quarter of 2022 onwards. MLS generated annual revenue of approximately $205 million for the 12-month period ending September 30, 2021.
Regarding the acquisition of MLS, Schneider National 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 to the growth of Schneider’s custom operations.”
Schneider National’s move to expand its truckload segment (the primary revenue generator) is wise, given the strength in its operations due to upbeat freight demand. The company’s top streak was up 23% year-over-year in the first nine months of 2021 due to higher revenue across the truckload, multimedia and logistics segments.
Zacks Rank & Other Key Picks
Schneider National holds Zacks rating #2 (Buy). Some of the other top-rated stocks in the broader transportation sector are as follows:
ArcBest . company ARCB ranked Zacks #1 (strong buy). The company has a surprising history of earnings. It has outperformed Zacks’ consensus estimate for earnings in each of the previous four quarters, with an average surprise of 27.4%. you can see The full list of Zacks #1 stocks today is here.
ArcBest shares are up more than 100% in a year.
Expeditors International of Washington EXPD holds Zacks #1 rating. The company’s earnings have outpaced Zacks Consensus’s estimate in each of the previous four quarters, with an average surprise of 29.1%.
Expeditors stock has risen in value by more than 38% in a year.
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