Chattanooga's fastest-growing business of the past decade will combine with an even faster-growing rival to create one of America's biggest freight and truck management services with sales expected to top $2 billion this year.
Less than 12 years after three former college roommates founded Access America Transport to improve shipments for a Chattanooga brick distributor, the business owners agreed Tuesday to sell their $600 million-a-year business. Coyote Logistics, a Chicago-based logistics management company, will buy Access America for an undisclosed amount.
"We think the opportunities are incredible with these businesses coming together and our focus is on growth, not on cuts or savings," Coyote Founder and CEO Jeff Silver said Tuesday. "There is a lot to work out yet, but we expect to close this deal by the end of the month and we absolutely plan to put a training center in Chattanooga and add some other business functions there."
Silver said he isn't looking for savings by combining the rivals as much as he is looking to better utilize the trucks and trains it contracts to use for shipments to propel the growth of both of the logistics businesses. Only about 15 percent of the business of the two firms appears to have overlapped in the past.
"We believe there is going to be the same or increased pace of job growth in Chattanooga," said Barry Large, one of the three founders of Access America who built the company from its start in 2002 to more than 500 employees and contractors today.
The founders of Access America -- Large, 36, Allan Davis, 35, and Ted Alling, 36 -- will retain an interest in the merged company but do not plan to exercise any management in Coyote. They said they will focus their attention as well as the "tens of millions of dollars" they will personally reap from the transaction on the Lamp Post Group, a start-up incubator in Chattanooga.
"We're entrepreneurs at heart and like nothing better than helping others to succeed in business," Davis said.
Alling, the CEO of Access America, said the company owners recognized that Coyote "is on a faster trajectory" and "had better IT operations" to serve major companies and continue to grow the scale of the business.
Access America does more "less-than-truckload shipping" and more flatbed shipping, while Coyote does more train shipments and logistics consulting.
Chad Eichenberger, the president of Access America since 2010, will serve as the combined company's president of brokerage under Silver.
Chattanooga will likely be the southern hub and the second-biggest among the 17 locations for the combined company, Silver said.
Coyote plans to open its 18th office later this year in Toronto as the company expands its shipments into Canada.
"We've got hiring plans for Chattanooga," Silver said.
In the nearly $150 billion-a-year shipping industry, the combined company will be second in size only to C.H. Robinson Worldwide Inc., which generated sales of more than $12.7 billion last year.
"There are 50,000 active trucking companies in the country and hundreds of thousands of shippers and the trucks are almost always in the wrong spot," Silver said. "What we're trying to do is get them in the right spot."
In addition to its expanding shipping management business, Coyote also is moving into logistics consulting. Coyote manages all of the logistics for companies such as Heineken beer, and the company also employs a team of MIT-trained engineers to help factories receive and move goods through their supply chains more efficiently.
Both Coyote and Access America grew at double-digit rates through the Great Recession. In fact, the founders of both companies credit the economic downturn for making shippers more cost conscious and willing to turn to logistics managers to help improve their shipments and freight hauling costs and reliability.
Both companies were recognized last year by Forbes magazine as among the most promising companies in America.
Most of Coyote's growth has come internally. The Chicago-based company bought the Memphis-based Integra Logistics LLC in 2007 and General Freight Services of Atlanta in 2008 and have expanded both operations since.
The deal announced Tuesday between Coyote and Access America is the outgrowth of meetings that began between Silver and Alling more than three years ago over lunch at an industry conference.
"The first time I walked into the Chattanooga offices of Access America is the only time I have been in any other office in our industry where I felt the same excitement as when you walk into our offices," Silver said.
"The more we have worked to try to put this together, the more obvious it has become that these cultures will absolutely just rock together."
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