This post was most recently updated at 1:25 p.m. CT, March 21.
Knight-Swift Transportation (CCJ Top 250, No. 5) is acquiring U.S. Xpress (No. 19) for $808 million, the company announced Tuesday.
The transaction has already been unanimously approved by Knight-Swift's Board of Directors and a Special Committee of the independent directors of the U.S. Xpress Board of Directors. The deal, which Knight-Swift in an investor presentation called a "rare opportunity to acquire company of this scale, in a sector where we have proven competence," is expected to close late in the second quarter or early third quarter this year.
[Related: Experts expect M&A in the transportation and logistics industry to thrive in 2023]
“The opportunity to add one of the largest and most well-known brands in our industry, with 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."
While the current freight environment is unfavorable for carriers, Jackson noted, "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," he said. "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.”
Indeed, Knight-Swift paid up for the Chattanooga-based U.S. Xpress, offering a 310% premium over U.S. Xpress’ closing stock price Monday.
