Author: rjackim

How to Value a Trucking Business in 2025

If you’re considering selling your trucking business, determining its value is the first step. This guide will walk you through the key aspects of valuing a trucking company in 2025, combining expert insights and current market trends to help you understand what your business is worth.

Why is Valuation Important?

Understanding your company’s value is essential for several reasons:

• Setting a realistic sale price: A proper valuation helps you set a realistic asking price, attracting serious buyers and avoiding wasted time.  The number one reason companies don’t sell is that sellers have unrealistic expectations of value. So getting this right from the start is essential.
• Negotiating effectively: Knowing your company’s value empowers you to negotiate favorable terms.
• Making informed decisions: Valuation provides a clear picture of your company’s financial health and potential, guiding your decisions throughout the sale process.

Factors That Affect the Sale Price

The ultimate sale price of your trucking company depends on a variety of factors:

• Business location: A business operating in a busy hub or serving a busy city will command a higher price.
• Asset value: Tangible assets (trucks, trailers, equipment) and intangible assets (goodwill, brand recognition) increase the sale price, especially when they generate significant revenue.
• Condition of the trucking fleet: Well-maintained trucks with good fuel efficiency are highly desirable.
• Prevailing market conditions: The overall health of the market affects valuation. A market slump can lower the sale price.
• Historical earnings and finance trends: Consistent earnings, positive financial trends, cost control, and a strong credit history are all significant pluses.
• Reliance on the owner: Buyers assess whether the business can sustain profits after the owner’s exit.
• Growth potential: A business with clear growth potential, such as an expanding customer base, is more valuable.
• Legal history: A clean legal history is essential.
• Client base: A large and reliable client base increases the sale price.
• Brand recognition and reputation: A reputable brand is a valuable asset.

Trucking Company Valuation Methods 

Here are several methods you can use to determine the value of your trucking company:

• Market Approach: This involves analyzing past market transactions of similar trucking companies to establish a valuation basis. However, accessing transaction data for privately owned trucking companies can be challenging. Public companies offer more transparency due to publicized M&A activity.
• Cost-based Valuation: This approach calculates the cost of creating a similar company from the ground up, including tangible and intangible assets.
• Asset Approach: This method determines the net value of a business’s assets minus its liabilities. It’s crucial to use the market value of your equipment and factor in goodwill or intangible value.
• EBITDA Multiples: This common approach applies an industry multiple to your company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

Understanding EBITDA Multiples for Trucking Companies

EBITDA is a key metric for valuing trucking companies. Here’s how to calculate it:

EBITDA = Net income + Interest + Taxes + Depreciation + Amortization

EBITDA for Privately Owned Trucking companies is slightly different.

Adjusted EBITDA = Net income + Interest + Taxes + Depreciation + Amortization + Owner Addbacks – CAPEX (capital expenditures)

To determine your company’s value using EBITDA, you’ll need to calculate the company’s Enterprise Value:

Enterprise Value = Adjusted EBITDA x EBITDA Multiple

Finally, estimate your company’s value:

Your trucking company’s value = Adjusted EBITDA x EBITDA Multiple (see below)

Your trucking company’s value = Adjusted EBITDA x EBITDA Multiple (see below)

Current EBITDA Multiples for Trucking Companies in 2025

Despite a very difficult freight market for the last several years, the average EBITDA multiples for privately owned trucking companies still ranges between 5x and 8x. However, these multiples can vary significantly based on company type and revenue range:

EBITDA Multiples for Privately Owned Trucking Companies, Q1 2025

It is important to note that these multiples are current as of Q4 2024 and are subject to change.

Revenue Multiples for Privately Owned Trucking Companies, Q1 2025

It is important to note that these multiples are current as of Q4 2024 and are subject to change.

Other Factors Affecting the Value of a Trucking Company

The type of trucking company also impacts valuation:

• Asset-based: Companies that own their fleets and facilities are typically less valuable that companies that lease everything. Asset-light companies receive slightly higher valuations due to lower costs and risks. Buyers show a preference for asset-light operations because of their ability to quickly adapt to changing market conditions.
• LT vs LTL: Companies that focus on long-haul freight are more valuable that less-than-truckload carriers.
• Specialized Equipment: Companies that run a lot of specialized equipment like reefers, tankers, or oversized flatbeds are more valuable than dry van carriers.
• Long-haul vs Short-haul:  Long-haul carriers are valued higher that short haul carriers.

Steps to Prepare Your Trucking Company for Sale

Once you understand the factors influencing value, take these steps to prepare for a sale:

1. Get in the Right Mindset: Be certain about your decision to sell and clear on your reasons. Determine the best time to sell, like when revenues are high or before a significant market shift. Plan what you’ll do after the sale.
2. Prepare Detailed Financial Documents: Organize financial records to demonstrate your business’s profitability. Key documents include:
   • Income statements
   • Balance sheets
   • Tax returns for the last 3 years
   • List of equipment (trucks, trailers, etc.)
   • Current agreements and contracts
   • Make sure your adjusted EBITDA calculation is correct
   • Cash flow statements
   • Credit statements
   • List of clients
   • Have your M&A advisor create a virtual data room to organize and store this information so its easily available to potential buyers
3. Address Legal Considerations: Ensure your business is legally sound by having the following easily available for a buyer to review:
   • Taxes and tax returns
   • Company bylaws
   • Partnership agreements
   • Privacy agreements
   • Meeting minutes
   • Details of any ongoing legal proceedings
   • Contracts with clients, employees, and suppliers
   • Intellectual property records (trademarks, etc.)
   • Existing leases
   • Have your M&A advisor create a virtual data room to organize and store this information so its easily available to potential buyers
4. Increase Value and Sellability: Improve your business to attract buyers. Diversify income sources and consider these enhancements:
   • Invest in well-maintained equipment, if necessary
   • Expand your customer base if possible
   • Enhance customer relationships and vendor partnerships
   • Embrace new technology
   • Implement systems for smooth operation without the owner’s daily involvement
   • Reduce debt if possible
   • Develop a strong management team
   • Reduce operational costs
   • Set up systems for a smooth transition
   • Resolve any outstanding legal issues
5. Hire an M&A Expert: An experienced M&A team can help you market your business, vet potential buyers, and finalize the sale agreement. They can include wealth advisors, investment bankers, accountants, and attorneys.
6. Market Your Company: Your M&A team will market your business to potential buyers. Your M&A advisor may also use online platforms, social media, and networking events.
7. Negotiate Favorable Sales Terms: Work with your M&A team to negotiate an attractive sale price and deal structure
8. Participate in Due Diligence: Cooperate with the buyer’s due diligence process by providing necessary records and answering questions
9. Finalize the Sale and Transfer: Complete the sale and transfer assets
10. Ensure a Smooth Transition: Help the new owner settle into the business by providing support and training

Trends in Trucking M&A in 2025

Several trends are shaping the M&A landscape for trucking companies in 2025:

• Preference for Asset-Light Operations: Buyers are increasingly favoring asset-light companies due to their lower operational costs
• Higher Value for Specialized Trucking Companies: Niche trucking operations with strong client relationships are attracting more interest
• Increased Deal Volume: With improving financing conditions, deal volume is expected to rise as acquirers consolidate smaller companies

The Value of Expert Guidance

Selling a trucking company is a time intensive and complex undertaking. Engaging experienced M&A advisors can significantly increase your chances of a successful sale at the best possible price. An M&A advisor with experience in the trucking and transportation sector can:

• Help you accurately value your business
• Prepare necessary offering documents and financial models
• Market your company effectively to financial and strategic buyers
• Negotiate favorable terms
• Manage the due diligence process
• Ensure a smooth closing and transition

By understanding the key valuation methods, market trends, and preparation steps, you can confidently navigate the sale process and achieve the best possible outcome for your trucking business.

About the Author and Jackim Woods & Co.

Rich Jackim is an trucking industry investment banker, entrepreneur, and former mergers and acquisitions attorney.

For the last 25 years, Rich has been providing boutique investment banking services to middle-market companies in a wide range of industries. He began focusing on the trucking and transportation sector in 2003 and wrote the Guide to Value Your Trucking Company, published by the American Trucking Association from 1997-2002.

Rich also founded a successful training and certification company called the Exit Planning Institute, which he sold to a private equity group in 2012.

Rich is also the author of the critically acclaimed book, The $10 Trillion Dollar Opportunity: Designing Successful Exit Strategies for Middle Market Businesses.

Jackim Woods & Co offers skilled mergers and acquisitions advisory services to privately owned trucking and transportation companies in both sell-side and buy-side transactions. Jackim Woods & Co has arranged over 100 successful transactions, ranging from less than one million to more than eighty million dollars in value.

If you own a trucking or transportation company and are interested in exploring your options, I would welcome an opportunity to speak with you.

Feel free to contact me at 224-513-5142 or rjackim@jackimwoods.com.