Patriot Transportation to go private in $65.9M deal (Courtesy of the Jacksonville Business Journal) — The largest transporter of fuels and chemicals in the Southwest is acquiring Jacksonville-based Patriot Transportation in a $65.9 million deal that will take the local company private.
The combination of Oklahoma City-based buyer United Petroleum Transports Inc.’s reach in Western states and Patriot’s 19 terminals and other infrastructure throughout the Southeast will create a top five bulk tank carrier by revenue with combined revenues in excess of $200 million, the companies said in a release.
The combined company will have more than 1,000 drivers operating from Arizona to Florida, with more than 30 terminals in 11 states, with United Petroleum Executive Chairman Greg Price saying in a statement that Patriot was “the perfect match.”
“Together we will enhance our shared value proposition and invest in exciting growth opportunities providing transportation solutions for new and existing customers,” he said.
Patriot’s business will continue to be operated through the Florida Rock & Tank Lines Inc. brand, United Petroleum said.
Patriot’s outstanding shares will be acquired for $16.26 each in cash. Shares had closed at $7.68 on Tuesday and soared after the announcement of the planned sale on Wednesday, reaching as high as $15.81 before closing at $15.60.
Almost 390,000 shares traded hands Wednesday, about 100 times more than its average volume.
The transportation company has been a mainstay in Jacksonville for decades, with the company’s history dating back to the 1960s as part of Florida Rock.
In 2015, Patriot Transportation was spun off as a standalone company, with Florida Rock’s real estate division — whose holdings are mainly in the Washington, D.C., and Baltimore area — continuing to operate as FRP Holdings Inc. (Nasdaq: FRPH).
Patriot’s share price has faltered a bit in the past three years, but its revenue has been on a roll in recent quarters, with efforts to raise driver pay stabilizing its workforce and enabling it to put more miles on the road.
In its most recently released quarterly results, the company boosted net income to $1.18 million, or 33 cents per share, a nearly 42.5% increase over the previous year.
“Over the first nine months of fiscal 2023, we added 42 drivers which allowed us to add business with new and existing customers and increase our miles,” CEO Rob Sandlin said during the company’s earnings call with investors in August.
The acquisition, Patriot board Chairman Tom Baker said, recognizes the quality of the organization.
“We appreciate the support of our shareholders and believe this transaction rewards them for their unwavering support,” he said in a statement.
The sale has been approved by Patriot’s board, with shareholders of 26.6% of the company signing off on the deal. The agreement includes 30 days when the company can consider other acquisition proposals.
The deal is expected to close by early 2024.
Once it does, Sandlin said in a statement, the focus is on growth.
“We are thrilled to partner with a company like UPT that appreciates Patriot’s proud history and is closely aligned with our mission and culture which is focused on safety, our customers and our employees,” he said. “I believe the combined strength of the management teams will allow us to execute a strategic plan for growth beyond our current footprint.”