Schneider to Acquire Midwest Logistics in All-Cash Deal

Logistics company Schneider National Inc. (SNDR) has revealed plans to fully acquire Midwest Logistics Systems (MLS) for an enterprise value of about $263 million. Shares of the company rose 2.8% on Tuesday to close at $27.28.

MLS is a truckload carrier with more than 1,000 professional drivers, operating 900 tractors across 30 central U.S. locations.

As per the agreed terms, MLS will operate as an independent subsidiary of Schneider, whereas the professional drivers and associates will continue to work under the MLS name. Notably, the deal has been financed with cash in hand.

The acquisition is expected to be immediately accretive to Schneider’s earnings per share. Also, beginning in the first quarter of 2022, MLS’ financial results will be reported in Schneider’s statements as part of the Truckload segment.

The President and CEO of Schneider, Mark Rourke, said, “The carrier’s family-owned nature combined with its strong culture and customer service make it a valuable contributor for growing Schneider’s dedicated operations. With this acquisition, we believe Schneider is on track to generate $1 Billion in annual revenue in our dedicated operations with over 5,000 trucks.”

Price Target

Based on 2 Buys, 3 holds and 1 Sell ratings from top analysts, Schneider has a Hold consensus. The average Schneider price target of $27.33 implies 0.2% upside potential from current levels. Shares have gained 25.9% over the past year.

Risk Factors

Investors should always be aware of the risks involved in any stock. According to the TipRanks’ Risk Factors tool, SNDR is at risk mainly from two factors: Finance and Corporate, and Production, which contribute 31% and 24%, respectively, to the total 29 risks identified for the stock.

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