ATL and BCI Notch Big Multiple on Sale of Pilot

ATL and BCI Notch Big Multiple on Sale of Pilot

ATL and BCI acquired family-owned Pilot in 2016 and the company is now the second-largest provider of B2C home delivery in the United States

Pilot provides air, ground and ocean transportation and logistics with more than 75 locations throughout North America and Western Europe

SOURCE: Pilot Freight Services

ATL Partners and British Columbia Investment Management Corporation have agreed to sell Pilot Freight Services to A.P. Moller – Maersk for $1.7 billion in cash.

Pilot Freight Services is a provider of air, ground and ocean transportation and logistics with more than 75 locations throughout North America and Western Europe. Pilot specializes in expedited and time-definite transportation services, international shipping, e-commerce and home (last mile) delivery services, product warehousing and inventory management. Pilot, led by CEO Zach Pollock, was founded in 1970 and is headquartered near Philadelphia in Glen Mills, Pennsylvania.

ATL and BCI acquired family-owned Pilot in October 2016 after identifying a structural shortage in the capacity required to meet the needs of shippers and consumers which was created by the rapid growth in the big and bulky segment of e-commerce home delivery and installation.

Pilot has grown from approximately $28 million of adjusted EBITDA and 800 employees in 2016 to an estimated $127 million of adjusted EBITDA and over 2,600 employees in 2021. According to ATL and BCI, Pilot is now the second-largest provider of B2C home delivery in the United States. Based on a purchase price of $1.7 billion, the EBITDA multiple for Pilot is 13.4x.

During the ownership term, ATL and BCI invested over $70 million in technology and data analytics, completed the acquisitions of seventeen franchisees, and closed three add-on acquisitions that expanded its e-commerce delivery services. The three add-ons were Manna Freight Systems in 2018, DSI Logistics in 2021, and American Linehaul in 2021.

“It has been a privilege to partner with ATL and BCI. They had incredible foresight on where to focus our efforts and investments, and without their guidance, Pilot would not be the company it is today,” said Mr. Pollock. “I am extremely proud of the amazing accomplishments of the entire Pilot organization. We are excited to be joining Maersk and for the significant opportunities this new chapter brings.”

A.P. Moller – Maersk (OTCMKTS: AMKBY) is a Danish shipping company that is active in ocean and inland freight transportation, as well as supply chain management and port operation. The company, led by CEO Soren Skou, was the largest container shipping line and vessel operator in the world from 1996 until 2021. Copenhagen-headquartered Maersk, with annual revenues of more than $40 billion and more than 76,000 employees, was founded in 1904 by Arnold Peter Moller, and the Moller family still controls nearly 70% of the company.

“We are appreciative and proud of the partnership we’ve had with the Pilot team in successfully executing on the vision of creating a differentiated, market leader to meet the growing e-commerce demand for big and bulky goods,” said Kirby Fine, a partner at ATL Partners. “ATL’s investment process centers around developing an investment theme over multiple years and partnering with a strong founder or management team to execute on that vision. It has been extremely rewarding to work closely with the talented team at Pilot and our partners at BCI, and we look forward to their continued success with Maersk.”

“The Pilot team has executed on a range of business improvements and growth initiatives over the past several years, substantially increasing the value of Pilot, and generating significant proceeds for our pension plan and insurance clients,” said Jason Cawley, a senior managing director at BCI. “Pilot represented the first co-sponsor investment for BCI’s Private Equity strategy. We have enjoyed a fulfilling partnership with ATL and the distinguished management team at Pilot during this investment.”

ATL Partners is a sector-focused private equity firm that invests in aerospace, transportation and logistics companies. The firm has a minimum equity investment requirement of $75 million and a target equity investment range of $150 million to $750 million which is supported by co-investment arrangements with its limited partners. New York City-headquartered ATL was founded in 2014.

BCI is one of Canada’s largest institutional investors with more than C$200 billion of assets under management. BCI’s private equity program, with C$20 billion of assets under management, makes both direct investments and fund investments. Victoria, British Columbia-headquartered BCI invests across all major asset classes including private equity.

Harris Williams and Morgan Stanley were the financial advisors to Pilot on this transaction which is expected to close during the first half of 2022.

© 2022 Private Equity Professional | February 11, 2022

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