What’s driving the flurry of M&A activity?

A flurry of merger and acquisition activity to start 2021 may just be a hint of what’s to come this year. We’ve seen 10 deal announcements cross our desks in the early weeks of this year, and they included some blockbusters.

Bison Transport found a new owner, TFI International made a bold push further into the U.S. by acquiring UPS’s beleaguered freight operations, and Titanium Transportation found the transformative acquisition it was looking for, landing International Truckload Services.

Spencer Tenney, president and CEO of The Tenney Group, isn’t surprised by the surge in M&A activity. He projects a 20% uptick in transaction values this year, with companies boasting more than US$50 million in annual revenues fetching about a 10% valuation premium.

So, what’s causing masked men and women to gather around boardroom tables during a pandemic to work out a deal? One reason for the urgency could be that business owners looking to exit the industry last year had to put those plans on hold to help their company survive the Covid-19 pandemic.

The Tenney Group worked on one deal last year that was delayed because everyone involved was sick with the virus. Buyers had to take into account the temporary impacts the pandemic had on a target’s business, and sellers had to shift their focus to keeping the company afloat during the turmoil. The Tenney Group coined the term EBITDAC – Earnings Before Interest Taxes Depreciation Amortization…and Coronavirus.


Coming tax reform could also be forcing a rush to the exits. The Biden administration is expected to usher in tax changes that could put less money in a seller’s pocket and more into the government’s coffers.

Mike McCarron, president of deal maker Left Lane Associates, told me the same concerns exist here in Canada. We have the largest debt-to-GDP ratio in the world and eventually it will no longer be possible to keep kicking the can down the road. Changes to capital gains taxes are likely, McCarron told me, and a race to beat them is driving some exits.

On the buy side, capital remains cheap, which is enticing some first-time buyers to enter the transportation space. Look no further than James Richardson & Sons, the new owner of Bison Transport, as an example.

If you are a trucking company owner looking to exit, it helps to always be prepared for when a buyer comes knocking, McCarron advises. And this is especially true when the seller has some leverage, which is likely to be the case through most of 2021, according to The Tenney Group.

How do you prepare your business for a sale? McCarron says hauling predominantly contract freight rather than brokered freight will make a company much more attractive. Lean on experts to establish the true value of your company, sans emotion. Determine what you need to make in order to support the retirement lifestyle you’ve worked so hard for.

And once your business is ready to sell, keep it sell-ready at all times, McCarron adds. “Sometimes the best offers are unsolicited,” he pointed out, adding a buyer may have five or six targets in mind and will quickly move on if its first choice isn’t sell-ready.

We hate to see the pioneers of this industry, those who built it into what it is today, hang up the keys. But the entrepreneurs who haul the majority of Canadian freight have earned their right to cash out. And when the time is right, you might as well do everything possible to maximize your return. For many, the time just may be right in 2021.


Avatar photo

James Menzies is editor of Today's Trucking. He has been covering the Canadian trucking industry for more than 20 years and holds a CDL. Reach him at james@newcom.ca or follow him on Twitter at @JamesMenzies.

Have your say

This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.


  • I do not blame them, for cashing out at this time of ridiculous fuel pricing.
    The government expects the companies to carry the load of high fuel prices.
    I don’t blame them for getting out at the right time. I’ve was a trucker for the last 30 years, spent the last 5 years working for Armour Trans before retiring. Congrats to Wes Armour for picking the right time to exit the business. The fuel prices keep going up at a crazy rate, once they get to a price of 1.50 a litre guess who is going to foot the bill.

  • It was good to hear a Canadian company purchasing a Canadian Company with good Family Values. It’s big now how you treat your employees and customers.
    I own Beers Transfer Services and run Beers Courier Services under it outta Sussex New Brunswick.