ADDISON — Eight years ago, the largest truck Don Daseke had ever been in was a pickup. He didn’t know the difference between an 18-wheeler and a flatbed — and he didn’t care.
He does now.
Since 2008, Daseke (pronounced dass-key) has purchased nine privately owned specialty trucking companies spread from the Pacific Northwest to Charleston, S.C.
Addison-based Daseke Inc. owns the largest fleet of open-deck, heavy hauling equipment in the country. These aren’t the 18-wheelers you see headed for Target or Wal-Mart. The company’s 3,000 tractors and 6,500 open-deck trailers haul such gargantuan cargo as Triton submarines, Boeing aircraft wings and wind turbine blades.
One of Daseke’s companies, Lone Star Transportation in Fort Worth, recently moved an acidizer for a refinery in South Texas that was 25 feet wide and 23½ feet tall and weighed 390,000 pounds.
Total weight — truck, trailer and load — was over 600,000 pounds. “And we moved that,” says Tex Robbins, its CEO who sold to Daseke in 2014.
The parent company is on a fast track to becoming Daseke’s second billion-dollar enterprise, with anticipated revenue of at least $750 million for 2016. It will be within striking distance of that milestone this year if he completes any of the several deals he has percolating.
And he’s pretty sure he will.
But Daseke says he isn’t buying companies or consolidating an industry. He’s investing in people. He won’t buy a company unless the leadership team agrees to stay put.
“Our strategy is to add companies that aren’t for sale, have a great management team, are profitable, have been doing it for a long time and aren’t necessarily looking to get out.
“They can keep doing what they’re doing,” Daseke says. “We don’t eliminate a single job when we acquire a company.”
The companies remain autonomous — their names still on the doors and trucks — yet symbiotic. Sounds like an oxymoron, but his CEOs assure me that it’s not.
Dan Wirkkala, CEO of Smokey Point Distributing in Arlington, Wash., was the first to come under Daseke’s ownership. He says nothing has changed in his day-to-day handling of the company.
“Don still checks in as he always has from Day One. He always starts off the same way: ‘How is the greatest CEO of Smokey Point Distributing?’ He’s positive and uplifting. It’s, ‘Hey, are you slaying any dragons today? What can I do to help you?’”
Daseke’s first billion-dollar enterprise was in real estate.
His dad was a real estate and insurance broker in a small Indiana town. The family moved just about every year because his father would flip the home they were living in for a profit of $1,000 or so.
Don started working when he was 9.
“I was the youngest delivery boy ever hired by The Crawfordsville Journal Review.”
He went to college 29 miles away at DePauw University on a scholarship and got his MBA in accounting at the University of Chicago business school on a scholarship arranged by his alma mater.
He’s since given millions back to DePauw in what has to be one of its best returns on investment.
In 1964, Daseke talked his way into a computer sales job at IBM — which typically only hired computer nerds — and quickly became its leading new-business salesman in the United States.
Eight years later, the 33-year-old formed a real estate investment company, tapping his former comrades at IBM as investors.
The only thing he knew about real estate was what he had gleaned from his father.
In retrospect, his first project should have been his last.
He and his IBM executive investors put up $1.525 million in equity to build a Tulsa lakeside apartment project that was supposedly on a 300-year flood plain.
The first disaster wasn’t a flood. It was a tornado that sent the part of the property under construction into the lake. The second and third disasters — which happened within four years of the first tenants moving in — were floods.
Fortunately, there were tax benefits that offset the losses. Most of his investor group stuck with him, and it also grew to include executives of other big-name corporations.
“Over the years, this private investment company raised more than $500 million in private capital — not through brokerage firms, just people who knew the principals of our firm — for real estate investments,” Daseke says.
Then came 1987. Tax benefits for apartment developments vanished with stroke of a pen. “We had problems all over the country,” Daseke says.
He moved from Connecticut to Dallas, trying to save the company.
He went on an Outward Bound program to save his soul.
“I’d just moved to Dallas, put my parents in a nursing home, was unexpectedly divorced, had problems with lenders all over the place. Life was the pits,” Daseke recalls.
He figured he’d clear out his mind by camping in northern Minnesota in February.
“I was at a frozen lake with no one else within eyesight, 30-below at night,” he recalls. “I had to dig out the ice and snow for a place to put the tent down.”
He started his fires with birch bark and put boiling water in insulated bottles that he kept in his sleeping bag to keep his toes from freezing.
“I spent a week there and realized I was going to hang in there and I was going to make it,” he says. “I was going to take it the old familiar day at a time.”
It took him several years to work out all the problems.
“I was very proud that I never had a lawsuit from any investor or bank, never filed bankruptcy personally. We never had any IRS challenges of any partnerships,” he says. “I convinced lenders that we were doing the best that we could and enough of them stayed with me.”
By 1994, the company, by then called Walden Residential, was strong enough for an IPO. Six years later, a private company bought it for $1.7 billion.
“That was my last real estate deal,” Daseke says.
Teak wood and trucks
Daseke, a soft-spoken, gentle man, is better known in Dallas social circles as the husband of Barbara Daseke, the fete-set interior designer.
They met while she was doing interiors for a hotel he was trying to build in Terre Haute, Ind. Everything was strictly business for the two years they worked together until Daseke abandoned the hotel project.
In 1996, the Cowboys were in the Super Bowl. Don decided to go and called Barbara out of the blue to see if she’d like to join him in Tempe, Ariz.
Emboldened by her acceptance, he immediately called her back to see if she’d like to accompany him on a business trip to Australia.
They’ve been together ever since.
The couple now lives in a house constructed entirely in teak wood. And there’s a reason why.
In 2006, Don purchased the largest importer of teak wood in the United States.
Getting into the trucking business would be an offshoot of that.
John Sloan, now president and CEO of Allegiance Capital, had worked with Daseke in buying East Teak Fine Hardwoods Inc., headquartered in South Carolina. The deal was complicated because the owner had committed suicide and the sale was being handled by the executor of his estate. But they pulled it off.
So Sloan thought of his longtime buddy when the absentee owner of Smokey Point wanted to sell his specialty trucking company because he was in the midst of a messy divorce.
Daseke knew nothing about the trucking industry but agreed to meet the management team and give the business a look.
He liked the people he met and what he saw.
“Don’s been willing to accept risks that typical private equity and venture capital firms would be uncomfortable with,” Sloan says. “In the end, he chose to invest in the teak company and Smokey Point because he had confidence in the people who were running the business. As a testament to that, those people are still running the businesses today.”
How does Daseke convince reluctant owners to sell their businesses to him?
He has a multi-pronged pitch.
For starters, the owners get millions of dollars that has been locked into their companies.
And most small trucking companies can only afford to carry $5 million to $20 million in liability insurance — not enough to handle a major accident. With Daseke, they’re covered by a $100 million umbrella liability policy.
They also become stockholders in Daseke Inc. So they get a piece of the action as Daseke grows.
But talk to the CEOs and they’ll tell you one of the biggest advantages in joining the Daseke fold is the ability to talk unvarnished shop with each other.
“We collaborate on the sales, recruiting, purchasing, maintenance, safety, HR to find little nuggets that we can take and insert into our companies to make them better,” Wirkkala says.
Daseke courted Phil Byrd, CEO of Bulldog Hiway Express in Charleston, S.C., for nearly three years before he said yes last July.
“I learned that Don is pretty persistent,” says Byrd, who had gotten to know Daseke when Byrd was chairman of the American Trucking Associations. “When he made his mind up that he wanted our company to become part of the Daseke family, he wouldn’t let go of that idea.”
The U.S. has a serious shortage of qualified drivers — especially when you’re looking for someone to handle a cab with a 13-axle trailer loaded with a mammoth wind turbine machine head, Byrd says. “Drivers are entrepreneurs, so when they see a successful venture, it captures their attention. So we’ve gotten a lot of driver attention by being a Daseke family member.”
The parent company can also shift drivers and equipment to help when one company is experiencing a short-term spike in business.
“Once we decided that Daseke was the right path for Bulldog, we haven’t looked back,” Byrd says. “It’s been everything we hoped for and more.”
Reprinted with permission from The Dallas Morning News.