Aterian Investment Partners, a private investment firm, through its portfolio company Xpress Global Systems LLC, has acquired Delta Distribution/Michigan Carpet, a specialized flooring less-than-truckload company headquartered in Grand Rapids, Michigan. 

The deal was announced Wednesday. No financial terms were disclosed.

XGS, based in Chattanooga, Tennessee, hopes the merger of the two companies will strengthen its overall operational footprint while building on the strategic growth objective.

Quick analysis from our market experts

Delta Distribution/Michigan Carpet was the biggest floor covering (carpet mainly) LTL provider in the upper Midwest after Watkins Sheppard exited. The company was able to undercut XGS rates and service to an extent because of its focused distribution channel in Michigan, Indiana and Ohio. This acquisition effectively removes the largest competitor in the area for XGS. 

Previous acquisition 7 Hills was a carpet consolidator focused largely in Texas. Much smaller than Michigan/Delta — but again this removes a decent-sized regional competitor from the market for XGS. 

Bottom line: These are good acquisitions for Xpress Global, removing some well-established competition from its path. There is little to no growth expected over the next several years for carpet sales, and attaining market share and pricing power is probably the best growth strategy considering diversification to square or palletized freight is extremely difficult. Rolled goods do not mix well with palletized freight on a trailer and requires specialized equipment for loading/unloading. Also, the competition is much stiffer. 

“Our acquisition of Delta Distribution complements the overall business offerings of XGS and again marks another meaningful evolution of our portfolio.” said Dan Martin, CEO of XGS. “Delta is a very well-run company that expands our network in the Midwest region and creates significant value for our stakeholders.”

Delta Distribution has been servicing Kentucky, Illinois, Indiana, Ohio, Missouri and Michigan since 1997. It operates 52 late-model company tractors and 185 carpet-spec trailers and has trailer swap programs with major north Georgia carpet mills.

It’s the second acquisition by XGS in the past month as the company continues its momentum in the logistics industry. In early July, XGS announced the acquisition of 7 Hills Transport, an asset-based carrier headquartered in Cartersville, Georgia. 

Aterian Investment Partners manages over $700 million of committed capital and invests in industry-leading, middle-market businesses.