Schneider National, Inc. (SNDR) is strengthening its operations with strategic acquisitions. To this end, Schneider announced that it had inked a deal to purchase Cowan Systems, LLC and affiliated entities (collectively, Cowan Systems) for a cash purchase price of almost $390 million, subject to certain adjustments. The deal includes separate agreements to purchase certain real estate assets relating to Cowan Systems’ business for almost $31 million in cash.
Based in Baltimore, MD, Cowan Systems is a dedicated contract carrier with a diversified portfolio of complementary services such as brokerage, drayage and warehousing. The company operates almost 1,800 trucks and 7,500 trailers across more than 40 locations throughout the Eastern and Mid-Atlantic regions of the United States.
The acquisition will be financed through existing cash on hand and borrowings under SNDR’s new $400 million delayed draw term credit facility.
Subject to the satisfaction of certain customary closing conditions, the deal is anticipated to get completed in the fourth quarter of 2024. On deal-closure, Cowan Systems’ financial results will be reported in corresponding Schneider Truckload and Logistics business segments.
Cowan Systems will operate as a wholly owned subsidiary of Schneider, following the footsteps of previous acquisitions of Midwest Logistics Systems and M&M Transport Services, LLC, which are also wholly owned subsidiaries of the company.
How Will SNDR Benefit?
The acquisition is anticipated to be accretive to SNDR’s earnings per share within the first year before consideration of anticipated synergies.
Additionally, the acquisition is expected to boost Schneider’s Dedicated business. With Cowan Systems, Schneider will operate more than 8,400 Dedicated tractors, which is almost 70% of SNDR’s Truckload fleet. This should boost SNDR’s position as one of the largest dedicated providers in the transportation industry.
Schneider’s president and CEO, Mark Rourke, stated, “This acquisition aligns with Schneider’s long-term vision to have customer-centric Dedicated solutions as the cornerstone of its Truckload segment. By complementing our organic Dedicated growth success with transactions like this, we are broadening our presence to provide greater value to our customers and stakeholders. We look forward to collaborating with the talented team at Cowan Systems to drive our now shared mission forward.”
SNDR’s Zacks Rank & Price Performance
Schneider currently carries a Zacks Rank #3 (Hold).
SNDR shares have gained 25.8% so far this year against the industry’s loss.
YTD Price Comparison
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Stocks to Consider
Some better-ranked stocks from the Zacks Transportation sector are C.H. Robinson Worldwide (CHRW) and Expeditors International of Washington, Inc. (EXPD). Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CHRW has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 10.29%.
CHRW has an expected earnings growth rate of 32.42% for 2024. The Zacks Consensus Estimate for CHRW 2024 earnings has been revised 7.3% upward over the past 90 days. Shares of CHRW have gained 26.2% so far this year.
EXPD has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters (missed the mark in the remaining quarter and met in the other quarter), delivering an average surprise of 4.75%.
The Zacks Consensus Estimate for EXPD’s 2024 earnings has been revised 6.4% upward over the past 90 days. EXPD has an expected earnings growth rate of 5.79% for 2024. Shares of EXPD have gained 58.5% so far this year.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
Schneider National, Inc. (SNDR) : Free Stock Analysis Report
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