Transportation

Transportation company owners who plan to sell their enterprise to an outside, third-party must take a hybrid approach in their strategic exit plan. In combination with mapping the value of the entity, or benchmarking, an owner must ascertain other aspects of the business that differentiate it from the pool of existing participants.

Companies within the transportation and trucking industry can be classified as either contract or service related. Typically the capital assets are held within the company itself and therefore the majority of ownership value tends to be derived from the balance sheet. To achieve a value above the fair market value (or market value) of the assets, an owner must enhance the goodwill of the company by examining those intangible value drivers listed for service entities and contractors. Trucking companies may be acquired by existing competitors to expand regional markets. In many cases, anti- drivers (listed as follows) hurt the investment value of a trucking enterprise.

  • Cargo and freight: Does the company transport hazardous materials or freight? If not properly managed, this type of transport service could be a detriment to the company as fines and litigious matters could consume the company‚Äôs goodwill.
  • Citations, fines, penalties, extraordinary property damage: How effective is management at controlling and reducing these types of expenses which include insurance costs (and claims), property damage (cargo or personal), citations and fines many times become a matter of permanent and public record.
  • Licensing, permits and the upkeep of maintenance: How effective is management at maintaining licenses, permits, tractor upkeep and maintenance records? Losing control or poor management of these areas will not only financially devastate a company but are also a matter of permanent record if violated.
  • Regional versus multi-regional versus international: Does the company operate in multiple states or cross country borders (Mexico and Canada)? If so, how effective is management at maintaining multi-regional licenses, permits, and international requirements?