We are pleased to share the recapitalization and acquisition of our client Barnhart Transportation, LLC by SMG Industries, Inc. (OTCQB: SMGI). The deal closed on July 7, 2023.

Barnhart Transportation (Barnhart) and its affiliate companies offer a comprehensive range of logistical services to meet the global demands of their customer base. Established in 2003 as a domestic flatbed hauler, the company has since expanded its service lines to encompass a diverse array of capabilities.

In addition to its domestic freight operations, which now include dry bulk, non-hazardous liquid, heavy haul, and intermodal transportation, the company has established operations in brokerage, international freight forwarding and warehousing, allowing door-to-door service around the world.

Barnhart operates northern and southern transportation terminals with accessibility to east coast international shipping ports. Barnhart Transportation is headquartered in North East, Pennsylvania, with service terminals in Moncks Corner and North Charleston, South Carolina.

Tim and Bryan Barnhart, the experienced leaders behind Barnhart Transportation, bring a wealth of experience, expertise and leadership to SMGI. Over the past two decades, they have successfully diversified the company’s footprint to meet evolving customer needs.

Their commitment to operational excellence and financial prudence has established a foundation of fiscal responsibility and sustainability. With Tim’s financial acumen guiding prudent decision-making and capital allocation, and Bryan’s operational focus optimizing processes and driving efficiency, the company is well-positioned for continued expansion.

SMG Industries Inc. (SMGI) is a is a growth-oriented transportation services company focused on the domestic infrastructure logistics market. Through several of the company’s wholly-owned subsidiaries branded as the “5J Transportation Group”, it offers specialized heavy haul, super heavy haul, flatbed, brokerage, and drilling rig mobilization services.

5J’s engineered permitted jobs can support up to 500-thousand-pound loads including infrastructure cargo associated with bridge beams, wind energy, power generation components, compressors, refinery and construction equipment. SMGI is headquartered in Houston, Texas, and has facilities in Floresville, Hempstead, Henderson, Houston, Odessa, Palestine and Victoria, Texas and Fort Mill, South Carolina.

The successful closing of this strategic recap/acquisition not only approximately doubles SMGI’s annual revenue and increases its adjusted EBITDA, but also brings operational and revenue diversification, strengthens the company’s balance sheet and adds exceptional expertise to its leadership team.

“Anticipating market trends and making strategic investments have been key to staying ahead in the dynamic global logistics market,” explained Tim Barnhart, the company’s new Chief Financial Officer and Board member.

“Within the combined entity, we see tremendous opportunities for growth and success,” emphasized Tim Barnhart. As CFO and Board member, his dedication lies in fostering fiscal discipline, capitalizing on operational efficiencies, and cultivating a culture of continuous improvement.

Leveraging the expertise of the outstanding team at SMG Industries, the company aims to establish a robust financial foundation, implement cost-saving measures, and capitalize on attractive growth opportunities within the transportation and logistics industry.

Bryan Barnhart, the newly appointed CEO and Board member, brings extensive experience in the transportation industry, making him well-suited to lead the combined entity towards a new era of success. “The acquisition of Barnhart Transportation by SMG Industries is a significant milestone for both companies,” stated Bryan Barnhart.

Bryan Barnhart added, “Together, management will leverage the transformative partnership to create a larger, more diversified transportation business, solidifying its position as a global leader. The merger unlocks attractive growth opportunities, strengthens customer relationships, and increases market capitalization. Combining its collective vision and strategic approach, the companies are poised to propel the company to new heights and set new benchmarks within the industry.”

Commenting on the recap/acquisition, Mr. Matt Flemming, Chairman of SMGI, expressed his enthusiasm, stating, “The acquisition of Barnhart by SMGI creates an attractive and diversified platform. We anticipate that the combined entity will establish itself as a larger, scalable, and more diversified transportation business, emerging as a regional leader in Texas, the Southwest and the Eastern Seaboard.”

Flemming added, “The combination will enhance customer relationships, reduce cyclicality and decrease customer concentration. With more than 500 non-overlapping customers, the cross-selling opportunities from a broader range of assets, capabilities, and services offer exciting opportunities for the growth of the combined company.”

“We are thrilled to welcome Barnhart’s talented employees to the SMGI team and believe this transaction positions us well to deliver enhanced growth and significant value creation for employees, customers and shareholders.”

Steven Madden, SMGI’s Chief Transition Officer and Board member, stated “We are excited to join forces with Barnhart Transportation. We believe this merger creates a value of 1+1=3 immediately. We have worked hard since those difficult COVID days to transform SMGI along with the help of Jimmy Frye (President of 5J Trucking and Board member) into a healthier, more profitable, turn-key, customer-focused, diversified, domestic infrastructure transportation company force.”

Madden added, “This acquisition and merger is just the beginning, and the Barnhart’s are a perfect fit culturally, operationally, and financially. It provides the necessary platform to springboard us organically and inorganically, giving us more capacity for expansion while gaining experienced, proven industry leaders and managers.”

“This merger will also provide additional strategic business units for both geographic regions. Most importantly, this acquisition helps our customers, employees and increases value to our shareholders.”

Generational Capital Markets’ Sr. Managing Director Mergers & Acquisitions, Phil Pizzurro, with the support of Vice President M&A, Chris Wolf, successfully closed the recap and acquisition. Generational Equity’s Executive Managing Director Rick Buchoz established the initial relationship with Barnhart.

“Barnhart is an exceptionally run business that has produced long-term, sustainable value to stakeholders over the past 20 years,” said Phil Pizzurro.

Pizzurro added, “The capabilities and expertise of Tim and Bryan combined with the industry and management experience of SMGI positions the combined entity for substantial and profitable future growth while ensuring the shared values remain intact for the benefit of the employees, customers, and the company.”