BlueGrace Logistics acquires freight brokerage Anthym

BlueGrace Logistics announced Monday afternoon that it had acquired Anthym Logistics, a freight brokerage with primary offices in Tampa, Florida, and Chicago. Anthym Logistics was formed in the fall of 2019 when Eddie Leshin, a veteran of American Backhaulers and Coyote Logistics, returned to the industry after a stint in private equity, combining Atomic Transportation and Cousins Logistics to form Anthym.

The deal is BlueGrace’s first acquisition since Warburg Pincus invested more than $220 million of growth equity into the primarily less-than-truckload brokerage in 2016. Since then, BlueGrace has grown rapidly: In 2019, BlueGrace booked more than $360 million in gross revenues and grew its full truckload volumes by 45%.

Anthym will add carrier capacity and freight density to BlueGrace’s truckload operation, as well as a specialization in refrigerated freight. At the time of the Atomic-Cousins merger, Anthym’s combined entity was on an $85 million revenue run rate.

“I am extremely pleased to announce this strategic transaction,” added Bobby Harris, BlueGrace Logistics founder and CEO. “The leaders of Anthym Logistics are some of the most highly respected members of the logistics community. With sales expertise across all modes of transportation, BlueGrace is gaining an incredible bevy of supply chain talent that would otherwise require many years to develop internally. We are making a giant leap forward today that will ensure we maintain and even accelerate the momentum that we have developed over the last decade,” Harris said.

Private buyers in the third-party logistics space who waited out 2018’s record revenue growth and high valuations may be poised to accelerate M&A operations now that the trucking market has cooled, margins have compressed across the industry, and, increasingly, asset prices may deflate.

In 2019, dry van truckload spot rates peaked around $1.61 per mile excluding fuel in December; the year before, the same seasonal retail surge saw truck spot rates hit $2.10 a mile. In the first half of 2019, brokers’ margins widened as their costs fell faster than their revenues, but eventually contracts were de-rated. Most freight brokerages struggled to grow organic revenue in 2019, and some, including Coyote Logistics and C.H. Robinson, imposed mass layoffs to right-size their workforces.

The BlueGrace-Anthym deal may come as a surprise to the industry because the widespread assumption was that Leshin planned to scale the brokerage independently of a financial sponsor. In his October 2019 interview with FreightWaves at the time of Anthym’s announcement, Leshin said private equity was better at financial engineering than operational integration, and that Anthym would likely pursue organic growth by being customer-centric.

Clearly, something changed. Financial details of the transaction were not disclosed, but there are aspects of the current trucking environment encouraging both buyers and sellers to come to market. We expect more consolidation in freight brokerage as large firms in a growth stance pivot to M&A.