The number of publicly held companies based in Arkansas dropped by one after USA Truck Inc. of Van Buren officially became a part of DB Schenker on Thursday.
The $435 million deal was six months in the making and then another three in the finalizing.
The two companies announced the deal June 23, and USA Truck shareholders approved it overwhelmingly Sept. 12.
USA Truck, in perhaps its last independent act, filed a request with the U.S. Securities & Exchange Commission on Thursday to be removed from the Nasdaq listing. The company will become a segment within DB Schenker’s nascent U.S. operations.
The German logistics giant announced plans two years ago to start up operations in the States. The acquisition of USA Truck was its first public move and fits neatly into its network.
Former USA Truck CEO and board member Tom Glaser said DB Schenker is already active in shipping to U.S. ports in the Southeast. Coincidentally, USA Truck has a strong service area in the Southeast, meaning DB Schenker will have a ready-made, experienced trucking operation to take goods from the ports.
“DB Schenker needed a footprint in the U.S.,” Glaser said. “USA Truck services, the strength of their service is east of the Mississippi. This will give them an opportunity to move their customers from Europe into the United States and having one transportation company handling it all the way.
“It opens the door for USA Truck for new customers and gives them a tremendous opportunity to grow.”
Any growing will be done, alas, without USA Truck CEO James Reed. I guess that should be “former” USA Truck CEO James Reed, who will not be retained by DB Schenker.
“After 8 a.m., I’ll be a free agent,” Reed joked to me on Tuesday; he was referring to the time of the deal finishing Thursday morning.
Reed will be OK financially even as he reenters the job market. The golden parachute compensation he will receive will be more than $7.7 million, and it’s hard to argue with him receiving a thank-you payday.
It seems like ancient history now, but USA Truck was a mess when Reed was named CFO in late 2016. When Randy Rogers was dismissed as CEO in January 2017, Reed was promoted, becoming the fourth CEO since 2015.
“Bob Peiser used to say all the time that we were the highest drama-per-revenue-dollar company that he had ever seen,” said Reed, referring to the company’s former chairman, who died in 2019.
Reed immediately set about putting USA Truck on a sound operational plan — based around fair pricing and routes — while raising the morale and esprit de corps in the company’s workforce. Revenue rose from $446.5 million in 2017 to more than $710 million this past year, when USA Truck posted a $24.8 million profit.
Glaser praised Reed’s drive and ability to bring stability to USA Truck.
“From 2007 to 2016 when James Reed came on board, we had gone through enormous management changes,” Glaser said. “He built a culture that helped that company succeed. It took a long time. The truckload business is a funny business, and it really runs on the people, not so much the finances. The people finally settled in and trusted him and took it to another level. It took, what, five years to get there, but he did a great job.
“He stabilized the management team, which stabilized the employment. They didn’t build it, but they got it back to where it always should have been.”
Reed said he plans to stay in the River Valley where his wife and six children have settled in. A month ago, Reed said he wasn’t sure what he would do after the merger. He said several companies sent out feelers about his possible interest in CEO positions.
“At the end of the day we are staying in western Arkansas,” Reed said. “My family loves it here. It has become our home. We’re not going anywhere.”