U.S Express was purchased by the massive Knight-Swift for $808 million, the company announced this Tuesday.
Both the Knight-Swift Board of Directors and a Special Committee of the independent directors of the U.S. Xpress Board of Directors have already unanimously authorized this deal. The deal, which Knight-Swift described as a “rare opportunity to acquire a company of this scale, in a sector where we have proven competence” in the investor presentation, is anticipated to be completed at the end of the second quarter or the beginning of the third this year.
“The opportunity to add one of the largest and most well-known brands in our industry, with a significant opportunity to improve earnings, gain customers, and reach more professional drivers, was very compelling to us,” said Knight-Swift CEO Dave Jackson.
“We expect to apply the same playbook that proved successful in the Knight-Swift merger as we share best practices, improve operations, and work together to help U.S. Xpress become the best that it can be.” he said.
Despite the fact that carriers are currently operating in an unfavorable freight environment, Jackson stated that “We would not have pursued the transaction unless we were confident in achieving our return thresholds within a few years.” Beyond that, we will continue to work with the U.S. Xpress team in pursuit of the performance levels of our other truckload businesses over the next several years, so the opportunity for our stockholders is substantial. “Moreover, this transaction will not slow down the geographic expansion of our LTL network or our other growth initiatives, as our financial and other resources remain significant.”
In fact, Knight-Swift made a full payment for the Chattanooga-based U.S. Xpress by providing a 310% premium over the company’s Monday-ending stock price.
Across the country, U.S. Xpress operates 14 terminals, 30 drop yards, 7,200 tractors, 14,400 trailers, 7,900 drivers, and 2,500 non-driving workers. Approximately 25,000 tractors and 93,000 trailers will make up the combined company’s truckload fleet, but U.S. Xpress will continue to be an independent company with a presence in Chattanooga.
U.S. Xpress CEO Eric Fuller called becoming part of Knight-Swift “an exciting opportunity for our people, our customers, and the Chattanooga and other communities we call home. The increased scale, operating expertise, and resources of the combined entity will allow the U.S.
Xpress to pursue new levels of service and efficiency. We’re delighted that U.S. Xpress will continue to operate as an independent brand and will do so with the support and partnership of one of North America’s strongest transportation companies.”
Knight-Swift became a significant LTL player after purchasing AAA Cooper in July 2021. The company doubled down on its efforts to build a national LTL network by acquiring complementary regional LTL carriers Midwest Motor Express and Midnite Express.
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