“With extensive industry knowledge, Thayer has not only been a valued partner in working to achieve a shared long-term vision, but they have provided hands-on operating expertise to develop and implement targeted initiatives along the way.”
– Mark DiBlasi, Chief Executive Office, Roadrunner Transportation Systems
Roadrunner Transportation Systems ("RRTS," or the "Company") is a leading non-asset based transportation and logistics services provider offering a full suite of solutions, including customized and expedited less-than-truckload, truckload and intermodal brokerage, and domestic and international air. RRTS leverages relationships with a broad network of over 9,000 third-party carriers to provide scalable capacity and reliable service to a diverse customer base of over 35,000 shippers in North America. RRTS’ business model requires minimal investment in transportation equipment and facilities, thereby enhancing free cash flow generation and returns on invested capital.
On May 18, 2010, RRTS closed an initial public offering (“IPO”) of 10.6 million shares of common stock at an offering price of $14 per share. As a result of the IPO, the Company’s shares are now publicly traded on the New York Stock Exchange under the symbol “RRTS”. The offering included 9.0 million shares sold by the Company and 1.6 million shares sold by certain selling stockholders. Net proceeds to RRTS from this offering were approximately $115.0 million, after deducting underwriting discounts and commissions and offering expenses.
Simultaneous with the consummation of the IPO, RRTS merged with Group Transportation Services (“GTS”), another THCP portfolio company and non-asset based provider of third-party logistics and outsourced transportation management solutions. Together, GTS and RRTS offer a “one-stop” transportation and logistics solution and are well positioned to capitalize on cross-selling opportunities with new and existing customers and to drive profitable growth both organically and through strategic acquisitions.
Thayer | Hidden Creek Value Add
Thayer | Hidden Creek ("THCP") has been actively engaged in the development and implementation of key initiatives at RRTS, including:
- Recruiting Mark DiBlasi as CEO (formerly managed a $1.2 billion division of FedEx Ground) and building an experienced and motivated management team with over 25 years of industry experience leading high-growth logistics operations;
- Bidding out all significant lanes to top and second-tier carriers and restructuring elements of the Company’s delivery network;
- Leading the acquisition of Sargent Transportation Group in October 2006 as RRTS’ truckload brokerage platform;
- Assisting with initiatives to deliver $15 million in cost savings ($12 million of which represented fixed costs) to sustain profitability and gain market share, which led to a 20% increase in new customers in 2009 despite the economic downturn;
- Assisting in the identification, diligence, execution, and integration of the December 2009 acquisition of certain assets and related operations of Bullet Freight Systems, a non-asset based transportation and logistics provider offering premium LTL service as well as TL and intermodal brokerage and air freight services; and
- Leading the IPO and simultaneous merger with GTS.
Collectively, these strategic and operational initiatives have helped RRTS sustain margins and cash flows and gain market share throughout the downturn in the freight market, and have positioned RRTS for substantial growth and profitability when industry volumes and pricing recover.
Outlook
Thayer | Hidden Creek continues to believe the outlook for RRTS is very positive despite a cautious near-term economy and freight environment. THCP continues to work closely with RRTS’ management to further improve the Company’s operating efficiency and drive market share gains. While management and THCP remain cautious about industry volume and pricing growth in the near-term, expectations are that RRTS’ positive new business trends will continue, and that the Bullet acquisition and merger with GTS will drive continued improvements and firmly position the Company to capitalize on the ensuing recovery in the transportation industry. The IPO provides increased operational and financial flexibility to pursue organic growth initiatives and strategic acquisitions. RRTS’ S-1 registration statement can be found on the US Securities and Exchange Commission website.
