Covenant Logistics Sells Its Transportation Factoring Assets For $132.2 Million

Wednesday, July 8, 2020

Covenant Logistics Group, Inc. on Wednesday announced the sale of the transportation factoring assets of its Transport Financial Solutions segment to Triumph Business Capital for approximately $132.2 million, including contingent consideration of approximately $9.9 million. Triumph Business Capital is an indirect wholly owned subsidiary of Triumph Bancorp, Inc. 

Chairman and Chief Executive Officer David R.

Parker commented: “TFS has grown significantly since inception in late 2011 and delivered consistently strong margins and returns. With a critical mass of over $100 million of capital deployed and strong growth opportunities, it was time to transition the business to an owner with a core lending focus and deep knowledge of the transportation industry.

"We are confident Triumph is the right partner for TFS’ clients going forward. The ability to pay down over $120 million of debt in the near term is consistent with our goals of significantly reducing our leverage and concentrating our business model on services and sectors where we can add considerable value to our partner-customers in the U.S. logistics industry.”

The transaction was structured as a sale of TFS’ factoring assets, consisting primarily of $103.3 million of net accounts receivable and related transportation factoring assets. In exchange, Covenant received cash proceeds, net of transaction expenses, totaling approximately $107.5 million, plus Triumph common stock valued at approximately $13.9 million, and the opportunity to earn contingent cash consideration (net of allocations to former TFS management) of up to approximately $9.0 million after the 12-month period ending July 31, 2021. The parties also entered into an ongoing referral arrangement.

The TFS transaction is expected to generate a third quarter pretax gain ranging from $34 million to $38 million. The third quarter gain from the sale of TFS is expected to modestly exceed the net amount of multiple second quarter gains, impairments, and expenses relating primarily to the sale or exit of certain real estate, downsizing unprofitable operations, reallocating fleet assets toward contract logistics operations, and other actions consistent with the strategic plan.


Women's Fund Of Greater Chattanooga Names Erika Burnett Executive Director

Judge Kristi Davis Joins The Court Of Appeals

New And Used Vehicle Sales Drop In July


The Women's Fund of Greater Chattanooga has named Erika R. Burnett as its next executive director. Ms. Burnett is a long time Nashville resident, entrepreneur, founder, innovator, teacher and ... (click for more)

Judge Kristi Davis was sworn in Monday as Tennessee’s newest member of the Court of Appeals. She was appointed to the Court by Governor Bill Lee just over 60 days ago. Judge Davis, who ... (click for more)

New and used vehicle sales in Hamilton County dropped in July with new vehicle sales at 972 and used vehicle sales at 4,506, according to figures from the County Clerk's office. That compares ... (click for more)



Business

Women's Fund Of Greater Chattanooga Names Erika Burnett Executive Director

The Women's Fund of Greater Chattanooga has named Erika R. Burnett as its next executive director. Ms. Burnett is a long time Nashville resident, entrepreneur, founder, innovator, teacher and advocate. Ms. Burnett's leadership experience strategic thinking, and passion for addressing root problems facing women and girls in the state stood out during the interview process, said ... (click for more)

Judge Kristi Davis Joins The Court Of Appeals

Judge Kristi Davis was sworn in Monday as Tennessee’s newest member of the Court of Appeals. She was appointed to the Court by Governor Bill Lee just over 60 days ago. Judge Davis, who has been a circuit court judge in the Sixth Judicial District in Knoxville since 2014, is the second female judge to serve on the Court of Appeals from the Eastern Division and the sixth woman ... (click for more)

Breaking News

Hamilton County Has Just 44 New Coronavirus Cases, But Highest Number Yet In Intensive Care; Tennessee Has 19 More Deaths

Hamilton County had just 44 new coronavirus cases on Monday, but had the highest number of COVID patients yet in Intensive Care - 35. The cases were down from Sunday's 62 new cases after recent numbers reached up to 175 in a day. Total cases now are 5,617. There were 85 COVID patients hospitalized as well as nine more suspected cases. Deaths remain at 48. The number ... (click for more)

President Trump Fires 2 TVA Board Members Over Outsourcing IT Jobs; Says TVA CEO Way Overpaid

President Donald Trump said Monday he was firing the chairman of the TVA board and a second board member for outsourcing TVA IT jobs overseas. Over 60 TVA's U.S. workers recently were laid off, including some in Chattanooga. James "Skip" Thompson of Decatur, Ala., is the current chairman. President Trump also said that TVA's Jeff Lyash is way overpaid, saying he gets around ... (click for more)

Opinion

Mark Kimsey Was The Real Deal And Larger Than Life

Rest In Peace to one of the most honorable, intelligent and entertaining human beings I have ever met in my entire life. Mark Kimsey, you were an eloquent and extremely talented writer and the epitome of what an American Law Enforcement Officer should be - courageous, scholarly, empathetic, proficient and selfless. Words can not begin to express how much you are respected ... (click for more)

Roy Exum: This Morning’s Prayer

The story I am told reveals that sometime this Friday afternoon a long caravan of over-the road buses will arrive Chattanooga as a stop of some modern-day Freedom Riders, this in remembrance of those titanic human beings who walked with Dr. Martin Luther King in his most victorious moment to quell racism in the South. Sponsored by a group known as “Atlanta Uprising” and sanctioned ... (click for more)