USA Truck Inc., Van Buren, Arkansas, has acquired privately held Davis Transfer Company of Carnesville, Georgia.
Davis is a high-service, Southeast regional carrier with approximately $50 million in revenues and a recent operating ratio in the upper 80s. The family-owned company was founded by Harry Davis in 1959 and has been managed as a full truckload carrier for 20 years by Gary, Bill, and Todd Davis. The company was named Florida’s Safest Carrier in 2016 and 2017.
Davis Transfer will operate independently of USA Truck as a wholly owned subsidiary, with Todd Davis joining the USA Truck leadership team as a vice president.
“Davis represents a unique opportunity to add capacity, loyal customers, and exceptional drivers,” said James Reed, president and CEO of USA Truck, in an announcement. “The Davis family has been a great steward of the organization, with a strong track record of success and profitability, and this partnership reflects the next natural step in the progression and growth of Davis.”
The acquisition gives USA Truck a stronger presence in the Southeast, Reed explained. “We believe there are opportunities to enhance the flow of driver movements into and out of existing markets – which we anticipate will minimize deadhead and enhance capacity availability and service to our customers. We intend to drive improvements to the maintenance cost structure of both USA Truck and Davis by leveraging Davis’ existing terminal infrastructure. Finally, we anticipate the realization of certain financial synergies, especially in the procurement area.”
The transaction will be primarily funded via the company’s revolving credit facility and cash on hand, with a minimal equity issuance provided to Todd Davis.