HOUSTON — Transportation services company SMG Industries has bought and merged with Barnhart Transportation, a Pennsylvania-based logistics services firm.
The total acquisition consists of Barnhart Transportation LLC, Barnhart Fleet Maintenance, LLC, Lake Shore Logistics, LLC, Lake Shore Global Solutions, LLC, Legend Equipment Leasing, LLC and Route 20 Tank Wash, LLC, which specializes in a wide range of transportation services, including full truck load, dry bulk, liquids, intermodal, LTL, heavy haul, drayage, transload and an “asset lite” brokerage business, according to a news release.
The acquisition cost amounts to $53.25 million, with $26 million paid in cash at closing, the news release noted. As part of the transaction, the principal owners of Barnhart received $19.25 million of the purchase price in the form of SMGI common stock, received $5 million of SMGI preferred stock and received a $3 million promissory note from SMGI.
Matt Flemming, chairman of SMGI, expressed enthusiasm about the deal, stating, “The acquisition of Barnhart by SMGI creates an attractive and diversified platform. We anticipate that the combined entity will establish itself as a larger, scalable, and more diversified transportation business, emerging as a regional leader in Texas, the Southwest and the Eastern Seaboard.”
Flemming further stated that combination of the two companies “will enhance customer relationships, reduce cyclicality and decrease customer concentration. With more than 500 non-overlapping customers, the cross-selling opportunities from a broader range of assets, capabilities, and services offers exciting opportunities for the growth of the combined company. We are thrilled to welcome Barnhart’s talented employees to the SMGI team and believe this transaction positions us well to deliver enhanced growth and significant value creation for employees, customers and shareholders.”
Tim and Bryan Barnhart, the leaders behind Barnhart Transportation, “bring a wealth of experience, expertise and leadership to SMGI,” the news release noted. “Over the past two decades, they have successfully diversified the company’s footprint to meet evolving customer needs. Their commitment to operational excellence and financial prudence has established a foundation of fiscal responsibility and sustainability.”
Tim Barnhart, the company’s new chief financial officer and board member, said that anticipating market trends and making strategic investments have been key to staying ahead in the dynamic global logistics market.
“Within the combined entity, we see tremendous opportunities for growth and success,” he said.
Bryan Barnhart, the newly appointed CEO and board member said of the deal: “The acquisition of Barnhart Transportation by SMG Industries is a significant milestone for both companies. “Together, management will leverage the transformative partnership to create a larger, more diversified transportation business, solidifying its position as a global leader. The merger unlocks attractive growth opportunities, strengthens customer relationships, and increases market capitalization. Combining its collective vision and strategic approach, the companies are poised to propel the company to new heights and set new benchmarks within the industry.”
Steven Madden, SMGI’s chief transition officer and board member, said he’s looking forward to the future with the combined companies.
“We are excited to join forces with Barnhart Transportation,” he said. “We believe this merger creates value of 1+1=3 immediately. We have worked hard since those difficult Covid days to transform SMGI along with the help of Jimmy Frye (president of 5J Trucking and board member) into a healthier, more profitable, turn-key, customer-focused, diversified, domestic infrastructure transportation company force. This acquisition and merger is just the beginning, and the Barnhart’s are a perfect fit culturally, operationally and financially. It provides the necessary platform to springboard us organically and inorganically giving us more capacity for expansion while gaining experienced, proven industry leaders and managers. This merger will also provide additional strategic business units for both geographic regions. Most importantly, this acquisition helps our customers, employees and increases value to our shareholders.”
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