B. Riley Securities served as the exclusive financial advisor to SMG Industries in connection with its acquisition of Barnhart Transportation, an established logistics and transportation solution provider based in Pennsylvania.

SMG Industries (SMGI) is a growth-oriented transportation services company focused on the domestic infrastructure logistics market.

The acquired Barnhart business consists of Barnhart Transportation, Barnhart Fleet Maintenance, Lake Shore Logistics, Lake Shore Global Solutions, Legend Equipment Leasing and Route 20 Tank Wash, which specializes in a wide range of transportation services, including full truck load, dry bulk, liquids, intermodal, LTL, heavy haul, drayage, transload and an “asset lite” brokerage business. The consummation of this acquisition significantly contributes to both companies expansion efforts and creates valuable cross-selling opportunities.

Transaction Details:

  • Barnhart Purchase: The acquisition cost amounts to $53.25 million, with $26 million paid in cash at closing. As part of the transaction, the principal owners of Barnhart received $19.25 million of the purchase price in the form of SMGI common stock, received $5 million of SMGI preferred stock and received a $3 million promissory note from SMGI.
  • Financing Structure: The transaction was financed through a $25 million revolving credit facility from a national lender, with $16.4 million available and $10.9 million funded at closing, leaving $5.5 million of additional liquidity available on the revolving credit facility after closing. In addition, a $31.7 million senior secured term loan facility with a term loan lender was utilized to fund the purchase price. The proceeds from these two new senior secured lenders were used to finance the acquisition, refinance a portion of SMGI’s existing debt that didn’t convert into SMGI common stock at closing and to cover associated transaction and professional fees and expenses.

B. Riley’s deal team was led by Jon Merriman and Ryan Bernath and included Erik Bullock and Ryan Knight.