Subsidiary to Chattanooga-based U.S. Xpress, Arnold Transportation Services, buys LinkAmerica Corp

Subsidiary to Chattanooga-based U.S. Xpress, Arnold Transportation Services, buys LinkAmerica Corp

December 23rd, 2012 by Ellis Smith in Business Around the Region

Chattanooga-based U.S. Xpress added to its trucking empire this month, as subsidiary Arnold Transportation Services agreed to gobble up competitor LinkAmerica Corp to create the 32nd largest truckload operation in the U.S.

The trucking industry's latest merger will double the number of tractors at Arnold to 1,400, grow its driver corps to more than 1,500 and take it to a total of 5,000 trailers, officials said. The combined revenue at the new entity will reach $250 million, up from $150 million currently, said Todd Smith, CEO of the Jacksonville, Fla.-based company.

"This really will create a very large regional service provider in terms of real size," he said.

The new company's larger size allows Arnold to better cover its southern region, and helps it attract and retain its most precious commodity: drivers.

"There's a driver shortage in the marketplace, and there has been for a number of years," Smith said. "This jump takes us from 850 to 1,500 overnight."

The deal will close in January. The privately held company did not disclose financial details.

U.S. Xpress will manage the back-end software and support for the merged entity, said Lisa Pate, chief administrative officer and general counsel for U.S. Xpress. From a corporate point of view, the merger makes sense in light of "soft demand" in the fourth quarter and the fact that both Arnold and LinkAmerica serve many of the same customers, she said.

"Instead of 700 trucks it becomes a 1,400 truck company day one, and that becomes attractive for marketing purposes." she said.

U.S. Xpress initially invested in Arnold Transportation Services in 2004, but operated it separately from the parent company to allow drivers and customers to do business with a smaller partner, she said. "In an environment where drivers are almost as valuable as your customers or even more valuable, it helps to keep it the way it is," she said. "Sometimes, they want to deal with a smaller carrier."

Pate is the oldest daughter of late U.S. Xpress co-founder Patrick Quinn, who passed away at age 65 in December 2011.