- Knight-Swift Transportation Holdings plans to buy U.S. Xpress Enterprises for approximately $808 million, in addition to transaction costs, according to a news release.
- Knight-Swift’s board of directors approved the acquisition Monday, a securities filing said. The cost reflects Knight-Swift assuming $484 million of outstanding debt and finance leases and purchasing $324 million in outstanding equity.
- U.S. Xpress shareholders must also clear the deal, which could occur late in Q2 or in early Q3. CEO and President Eric Fuller said in a statement that the carrier will continue to operate as an independent brand.
Knight-Swift has waited on M&A deals, positioning itself for opportunities and expressing interest in potential purchases. Now the carrier says it has a "rare opportunity to acquire a company of this scale."
That comes as U.S. Xpress has sought to cut tens of millions of dollars in costs annually through restructuring. Meanwhile, the carrier's board had a special committee examine and approve the deal with Knight-Swift, according to the news release.
"The increased scale, operating expertise and resources of the combined entity will allow U.S. Xpress to pursue new levels of service and efficiency," said Fuller, who will transition out of his role along with other family members and CFO Eric Peterson.
The combined company would have a TL fleet of approximately 25,000 tractors and 93,000 trailers.
Within U.S. Xpress, the Fuller family holds approximately 58% of the company's voting power and plans to vote in favor of the deal.
The acquisition also hinges on a "majority-of-the-minority" approval of outstanding shares beyond the Fullers, company officers and directors or Knight-Swift, the release said.
Knight-Swift lauded the deal for its potential to "add one of the largest and most well-known brands in our industry," gain customers and reach more drivers, Knight-Swift CEO and President Dave Jackson said in the release. The carrier expects to grow its revenue base by nearly 30%.
"Although it will take time, particularly given the current freight environment, we would not have pursued the transaction unless we were confident in achieving our return thresholds within a few years," Jackson added.