As businesses face time-sensitive challenges in global supply chains, efficient and reliable logistics solutions become increasingly critical. Roadrunner Transportation Systems understands this dynamic well and is strengthening its competitive position in the fast-growing logistics market through strategic acquisitions.
The Wisconsin-based third-party logistics provider recently announced it has reached a definitive agreement to acquire Michigan-based Active Aero Group for approximately $115 million. The transaction, expected to close by late September, marks Roadrunner's fourth acquisition in 2014 as it continues to solidify its position in the logistics sector.
Active Aero: Specialists in Ground-Air Transport
Active Aero specializes in ground and air expedited services, with its core strength lying in its proprietary Transportation Management System (TMS). This technology platform utilizes spot bidding techniques and controlled capacity to deliver efficient, cost-effective logistics solutions that meet customers' stringent time requirements.
The company serves diverse industries including:
- Life sciences
- Automotive
- Consumer goods manufacturing
- Defense contracting
- Utilities
- Retail
Active Aero's service portfolio encompasses ground expedited transport, air freight, on-board courier services, aircraft chartering, unscheduled truckload transportation, and hybrid solutions. The company reported approximately $265 million in revenue for the 12 months ending June 30, 2014, and is expected to contribute to Roadrunner's earnings growth in the fourth quarter.
Strategic Rationale Behind the Acquisition
Roadrunner CEO Mark DiBlasi emphasized that the acquisition aligns with the company's long-term strategic objectives. "Providing air and ground expedited services to meet customers' comprehensive transportation needs has always been a key strategic goal for Roadrunner," DiBlasi stated. "Active Aero's strong market position stems from its high-quality services, personnel, and unique expedited service portfolio. We believe Active Aero perfectly complements our strategy and serves as an excellent platform for expanding our expedited services globally."
Roadrunner's Acquisition Strategy
The Active Aero purchase represents part of Roadrunner's aggressive 2014 expansion strategy, following three earlier acquisitions:
- July: Indiana-based regional logistics provider ISI
- February: Arkansas-based Rich Logistics (full truckload and expedited services)
- March: Unitrans International Corporation (non-asset-based international logistics)
Since January 2006, Roadrunner has completed nearly 30 acquisitions. Company executives have consistently sought well-operated, well-managed, profitable businesses with non-asset or light-asset models. "Even when we occasionally acquire asset-based companies, we look for those that provide capacity—actual carriers that can expand our coverage or complement existing resources to build our service portfolio and immediately add earnings," explained a Roadrunner executive in a previous interview. "Cultural fit is equally crucial—if we don't see strong alignment between the acquired management team and ours, we walk away from the deal, as we've done before."
Market Perspective
Stifel Nicolaus analyst Dave Ross noted in a research report that while Active Aero's largest business concentration lies in the automotive sector, Roadrunner aims to diversify its revenue base and has identified cross-selling opportunities with industrial manufacturing clients.
Ross also observed that Active Aero's competitor NLM was acquired by XPO Logistics late last year, signaling that expedited transportation management is becoming a critical component in developing comprehensive logistics service platforms.
Compared to previous Roadrunner acquisitions, Active Aero brings substantial assets including USA Jet Airlines' fleet of short-range narrow-body aircraft, access to 100 U.S. and 70 Mexican aircraft through leases, 50 company-owned trucks, a network of 750 carriers with over 9,000 trucks, plus Roadrunner's existing fleet of 4,000 trucks and relationships with 140 carriers operating 9,500 Mexican trucks.
Expected Benefits for Roadrunner
The acquisition is projected to deliver several advantages:
- Enhanced expedited services: Active Aero's expertise will significantly boost Roadrunner's air and ground expedited capabilities
- Expanded customer base: Diversification across multiple industries
- Increased profitability: Immediate earnings contribution
- Broader geographic coverage: Strengthened presence in U.S. and Mexican markets
Industry Implications
The Active Aero acquisition represents a strategic move for Roadrunner as it consolidates its position in the logistics industry. With global supply chains becoming increasingly complex and time-sensitive, expedited service capabilities are growing in importance. The transaction also reflects ongoing industry consolidation as major logistics providers expand their service offerings and geographic footprint through acquisitions.
Successful integration of Active Aero and other acquired companies will be crucial for Roadrunner's future growth. The company must continue investing in technology and infrastructure to meet evolving customer demands while navigating integration risks, competitive pressures, and macroeconomic uncertainties.