Why Is USA Truck (USAK) Stock Up 110% Today?

  • DB Schenker is combining with USA Truck (USAK) in an acquisition valued at roughly $435 million.
  • USAK shareholders will receive $31.72 per share in cash.
  • Shares of USAK stock were down 28% year-to-date before the acquisition, but have more than doubled since.
USAK stock - Why Is USA Truck (USAK) Stock Up 110% Today?

Source: Vitpho/Shutterstock.com

Shares of USA Truck (NASDAQ:USAK) are up more than 110% today after DB Schenker agreed to acquire the company for approximately $435 million. DB Schenker is a private company based in Germany that engages in logistics services via land, air and ocean. The company is 100% owned by Deutsche Bahn, a German railway company.

DB has 430 land transportation branches throughout Europe, and its freight ships transport more than 5,500 containers per day to global ports. DB also provides eSchenker, which is an all-in-one logistics system to help with supply chain efficiency. In addition, the company employs 76,000 employees in more than 130 countries.

USA Truck currently serves more than 20% of Fortune 100 companies. The company boasts a fleet of 1,900 trucks, 2,100 employees and partnerships with more than 36,000 contract carriers.

Shareholders of USAK stock will receive $31.72 per share in cash from the acquisition. The price represents a 117% premium from Thursday’s closing price of $14.58. Furthermore, the acquisition is expected to close before the end of the year. After the acquisition completes, USAK will cease to trade on the Nasdaq.

USAK Stock: DB Schenker Acquires USA Truck

DB seeks to expand USA Truck’s business in the U.S. and become the “premier North American transportation solutions provider.” The company also plans on using its logistics expertise to create synergies that benefit USA Truck’s existing customers. With USA Truck’s existing freight network across the U.S. and Mexico, DB seeks to expand and improve shipping and supply chain management strategies.

“USA Truck is the perfect match for DB Schenker’s strategic ambition to expand our network in North America and foster our position as a leading global logistics provider,” said DB Schenker CEO Jochen Thewes. “Together we will enhance our shared value proposition and invest in exciting growth opportunities and sustainable logistics solutions for new and existing clients.”

Meanwhile, USA Truck reported its seventh consecutive quarter of record earnings during Q1. Consolidated operating revenue tallied in at $201.1 million, up 26.8% year-over-year (YOY). Trucking operating revenue came in at $116.1 million, up 12.6% YOY. The company is also profitable and reported earnings per diluted share of $1.45, up 262.5% YOY.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


Article printed from InvestorPlace Media, https://investorplace.com/2022/06/why-is-usa-truck-usak-stock-up-110-today/.

©2022 InvestorPlace Media, LLC