JB Hunt goes shopping for furniture with $87M acquisition

Dive Brief:

J.B. Hunt will buy Zenith Freight Lines, a subsidiary of Bassett Furniture Industries, for $87 million, the two companies said on Monday. The deal is expected to close Feb. 28.
While J.B. Hunt is buying Zenith Freight Line's assets, the carrier and the furniture company will enter into an agreement that continues Zenith's services for Bassett.
Bassett's interest in the sale comes at a time when major for-hire carriers, flush with cash and credit, are looking around for deals to expand their operations, grow younger segments and grab scarce capacity from carriers that were once competitors.

Dive Insight:

Consolidation in the furniture freight business is "inevitable," Robert H. Spilman Jr., Bassett CEO and board chair, said in the press release. Spilman said that became obvious as his team spoke about a potential sale to J.B. Hunt.

"As discussions with J.B. Hunt progressed, we came to understand the benefits that the scale of J.B. Hunt could provide in terms of equipment, technology, driver recruitment, intermodal transportation and warehousing density," said Spilman. "In addition, we developed a healthy respect for the management team and their operating culture."

Zenith had revenues of $87 million during the fiscal year ending Nov. 30, the companies reported. Bassett was one-third of that business.

For J.B. Hunt, the acquisition means an expansion of its Final Mile Services segment, which it has been seeking to grow. The segment has 116 locations and more than 3.5 million square feet of warehouse and facilities space, with access to 100% of the 48 contiguous states, the carrier said.

LTL carriers such as J.B. Hunt were already the envy of the trucking market, with their superior profit margins over TL. And they were already grabbing more interest as targets of acquisitions from TL carriers.

As one of the largest for-hire carriers in the nation, J.B. Hunt does not need to worry about being a target. But the carrier has desired to grab a larger share of the final-mile sector, with its booming demand caused in part by e-commerce.

The company has been making various buys in that sector since 2017. In late 2020, J.B. Hunt absorbed an existing player when it bought Mass Movement, a delivery company that delivered more than 2 million equipment pieces to 3,500 fitness centers since 1996.

Before that, J.B. Hunt bought a pool distributor, Special Logistics Dedicated, in July 2017; Cory 1st Choice Home Delivery, a furniture deliverer, in January 2019; and RDI Last Mile, also a furniture deliverer, in January 2020.