Recently, I met with the owners of a trucking company about selling their business.
Like a lot of truckers who watched their once-solid earnings erode over the last three years, they expected their balance sheet to firm up in 2025. The company is doing OK financially, but the owners aren’t sure if they can stomach more volatility.
They want out but think it’s a bad time to sell. Hold on a minute.
An uncertain market can be a great time to sell your business or make an acquisition. And this market has some particular advantages.
Active market
Savvy sellers have a few things going for them.
First, there are a lot of trucking businesses on the edge. Fleets that are barely hanging on financially. They’re one lost contract away from folding. There’s no “next generation” to take over. They loaded up on iron during the Covid rush and now run with older, inefficient, out-of-warranty equipment. These aren’t undervalued companies, they’re distressed.
Second, many owners are motivated to sell. I don’t know a Canadian trucker who isn’t sick and tired of all the BS. Owning trucks is not as much fun as it used to be.
Some buyers see opportunities to scoop up carriers for cheap. They know it’s a good time to buy assets at reduced valuations. But the smart ones look past the balance sheet. Good bones are good bones regardless of the financial statements.
If your company has a sound foundation, there’s not as much competition as you think.
Solid numbers, quality customers, a stable driver corps, newer trucks, and an experienced staff act as a magnet, attracting buyers looking for a diamond in the rough. These carriers outperform their peers because of a secret sauce, geographic scale, or some other competitive advantage.
If that sounds like your fleet, now is a great time to sell. Deal tension from competing suitors will increase your negotiating power and the sale price.
Bargains and lifelines
There’s also less competition if you’re looking to buy.
Historically, buyers prefer to sit on the sidelines in tough markets. They’re more worried about their own ship than patching holes in someone else’s. This is no time to make an expensive mistake.
Yet experienced, strategic buyers are taking a page from Warren Buffet’s playbook. It preaches that down-markets are the best opportunity to buy good companies at reasonable prices. That’s why he’s sitting on mountains of cash.
In any M&A scenario, less competition is good for deal-making.
Limited options
Being a buyer or a proactive seller is not in the cards for struggling fleets. So what do you do if you think you’re out of options?
It’s called mergers and acquisitions for a reason.
One plus one can equal three, yet people rarely consider merging with another company. With the right partner, the benefits of joining forces with an industry pal or competitor can be a game-changer.
If your best option is to grin and bear it, at least make sure you’re sell-ready. That way, you can answer the door if an interested buyer comes knocking.
Because you never know. After all, a knock on the door in a tough market is how I sold MSM Transportation. Glad I was ready to open it.
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