Daseke’s Acquisition of Aveda Transportation

Vinson & Elkins advised Daseke, Inc. on the deal

Daseke, Inc. (NASDAQ:DSKE) (NASDAQ:DSKEW), the largest owner of flatbed and specialized transportation and logistics solutions in North America, has entered into a merger agreement with Aveda Transportation and Energy Services (TSX-V:AVE), one of the largest oil rig moving companies in North America.

Under terms of the agreement, Daseke will pay C$0.90 (US$0.71) per share plus the assumption of Aveda debt. In addition, up to C$0.45 (US$0.36) per share in cash contingent consideration to be paid based on EBITDA earnings. All figures have been translated from Canadian dollars into U.S. dollars at an exchange rate of 0.79.

As one of the largest in North America, Aveda provides specialized transportation services and equipment required for the exploration, development and production of petroleum resources in the U.S. and Canada. Aveda owns one of the largest and youngest fleets in the industry with approximately 430 tractors, 660 trailers and 200 light-duty trucks.

Aveda shareholders will have the choice of accepting cash, the equivalent in Daseke stock, or a combination. The agreement was unanimously approved by both companies’ boards of directors, which includes Aveda’s largest shareholders, Werklund Capital Corporation and Werklund Ventures Ltd.—holders of 25% of Aveda’s stock. The transaction is expected to close in June, subject to Aveda shareholder approval and other customary closing conditions.

In addition to the scope of its fleet, Aveda has one of the lowest employee turnover rates, as competitive wages, ongoing personal development and room for advancement attracts top talent that grow with the company over the long-term.

Aveda’s revenue base is diversified across all seven of the major U.S. oil basins, which account for nearly 90 percent of its revenue. Aveda owns approximately 1,300 pieces of equipment, and a November 2017 outside equipment appraisal valued Aveda’s machinery and equipment at approximately C$114 million (US$90 million).

In 2017, Aveda generated C$200 million (US$158.0 million) in revenue, up 172 percent from C$73 million (US$57.7 million) in 2016. Adjusted EBITDA in 2017 improved significantly to $15.9 million (US$12.6 million) versus a negative EBITDA of $6.9 million in 2016 (negative US$5.5 million).

Daseke, Inc. operates as a transportation company. The Company, led by Don R Daseke, Ronald Scott Wheeler and Angelia J Moss provides fleet management, logistics, trucking, and open deck transportation services. In 2017, Daseke recorded $846 Million Revenues.

V&E advised Daseke with a team led by counsel Lanchi Huynh (Picture) and associate Michael Gibson, with assistance from partner Alan Bogdanow, senior associate Thomas Laughlin and associates Zach Spencer and KJ Pedersen. Also advising were associates Austin Elder and Desi Baca; partner Chris Dawe and associates Rafa Alvarado and Marco Chan; partner Randy Jurgensmeyer and associate Courtney Hammond; counsel Larry Pechacek and associate Ross Woessner; partner Brian Bloom; partner Vanessa Griffith; and counsel Scott Brown.

Involved fees earner: Lanchi Huynh – Vinson & Elkins LLP; Michael Gibson – Vinson & Elkins LLP; Alan Bogdanow – Vinson & Elkins LLP; Thomas Laughlin – Vinson & Elkins LLP; Zachary Spencer – Vinson & Elkins LLP; Desiree Baca – Vinson & Elkins LLP; Kjarom Pedersen – Vinson & Elkins LLP; Austin Elder – Vinson & Elkins LLP; Christopher Dawe – Vinson & Elkins LLP; Rafael Alvarado – Vinson & Elkins LLP; Marco Chan – Vinson & Elkins LLP; Randy Jurgensmeyer – Vinson & Elkins LLP; Courtney Hammond – Vinson & Elkins LLP; Larry Pechacek – Vinson & Elkins LLP; Ross Woessner – Vinson & Elkins LLP; Brian Bloom – Vinson & Elkins LLP; Scott Brown – Vinson & Elkins LLP;

Law Firms: Vinson & Elkins LLP;

Clients: Daseke, Inc.;

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Author: Ambrogio Visconti