Know exactly what to verify before buying a 3PL or freight brokerage — from contract revenue quality to carrier network depth and TMS infrastructure.
Find Third-Party Logistics (3PL) Acquisition TargetsAcquiring a lower middle market 3PL requires scrutinizing revenue durability, carrier relationships, and technology infrastructure. Fragmentation creates opportunity, but customer concentration, owner dependency, and spot-freight exposure are common deal risks that diligence must surface before closing.
Validate EBITDA, normalize owner compensation, and distinguish stable contract revenue from volatile spot freight to assess true earnings power.
Break down trailing 3-year revenue by type. Contract and managed freight signals durability; high spot freight exposure creates unpredictable EBITDA and weak debt service coverage.
Identify personal expenses, above-market owner salary, and one-time costs commingled in financials. Recast to accrual-basis EBITDA to establish a defensible valuation baseline.
Request a revenue-by-customer report for the top 10 accounts. Flag any single client exceeding 20–25% of revenue as a lender and deal-structure risk.
Evaluate carrier network strength, customer contract terms, and key employee dependency to assess operational continuity post-acquisition.
Obtain all active customer agreements. Verify contract lengths, auto-renewal provisions, SLA penalties, and whether pricing includes carrier rate pass-through mechanisms.
Request a top-20 carrier list with annual volumes, rate agreements, and exclusivity terms. Assess whether relationships are held by the founder or distributed across operations staff.
Identify account managers, dispatchers, and ops staff with critical carrier or customer relationships. Evaluate compensation, tenure, and whether retention agreements are in place.
Assess TMS and WMS infrastructure, EDI integrations, and IT vendor contracts to determine scalability and post-close upgrade costs.
Identify the current TMS and WMS vendors, licensing costs, and system age. Outdated or manual platforms signal high post-acquisition IT spend and operational headcount inefficiency.
Document all active EDI connections and API integrations with shippers and carriers. These integrations create switching costs and sticky revenue; gaps signal scalability risk.
Review SaaS agreements, software licenses, and cybersecurity posture. Confirm contracts are assignable post-close and identify any near-term renewal or upgrade obligations.
Verify the Third-Party Logistics (3PL) acquisition qualifies for SBA financing, the purchase price is supportable by the verified cash flow, and the deal structure protects the buyer's downside.
Confirm the Third-Party Logistics (3PL) meets SBA 7(a) eligibility requirements: the business is for-profit, U.S.-based, within SBA size standards, and the buyer meets personal financial requirements. Some industries have specific SBA restrictions — verify before LOI.
Model verified normalized EBITDA against projected SBA loan payments at current rates. A $1M SBA 7(a) loan at 10.5% over 10 years costs approximately $13,000/month. The Third-Party Logistics (3PL) must generate at least 1.25x debt service coverage after a market-rate manager salary to pass underwriting.
Confirm the seller note is properly subordinated to the SBA loan and goes on 24-month standby as required by SBA rules. If an earnout is included, define exact measurement metrics, time period, and dispute resolution process before signing the purchase agreement.
Before signing a Letter of Intent, request these documents from the seller. Missing or incomplete items are a red flag — not a reason to proceed without them.
Expect 3.5x–6x EBITDA. Asset-light freight brokerages with diversified contracts and modern TMS infrastructure command upper-range multiples; commodity spot-freight models trade at the lower end.
Yes. 3PLs are SBA-eligible. Typical structures include 10–15% buyer equity, an SBA 7(a) loan covering the majority, and a seller note of 5–10% to bridge any valuation gap.
Request a 3-year revenue-by-customer report. Any single client above 25% of revenue is a risk flag. Prioritize targets with multi-year contracts and demonstrated 90%+ annual customer retention rates.
Key-person dependency. Founders often hold all top carrier and customer relationships personally. Require a 12–24 month transition plan, consulting agreement, and retention incentives for second-tier operations staff.
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