Roadway Corp. and Arnold Industries Inc. jointly announced today that they have entered into an agreement for Roadway to acquire Arnold Industries for $21.75 per share in cash. Lebanon, PA-based Arnold Industries and its subsidiaries, New Penn Motor Express and Arnold Transportation Services, will become subsidiaries of Roadway Corporation.
In addition, Roadway has entered into an agreement with the management team at Arnold Logistics, a division of Arnold Transportation, and E. H. Arnold, president & CEO of Arnold Industries, granting them the exclusive right to enter into an agreement to purchase Arnold's logistics operations for $105 million in cash from Roadway after the acquisition of Arnold Industries is completed.
The total value of the transaction will be approximately $475 million, net of the anticipated sale of the logistics operations.
The acquisition is expected to be completed before the end of the year. E. H. Arnold has entered into an agreement with Roadway to vote his shares of Arnold common stock, approximately 16% of Arnold's current outstanding common stock, in favor of the merger.
Roadway Express, New Penn Motor Express and Arnold Transportation Services will operate independently under their respective brand names. Each company's management team and headquarters location will remain the same. Michael S. Walters will continue in his role as President & CEO of Arnold Transportation Services, and will report to Robert L. Stull, vp – new venture commerce at Roadway Corporation.
"We are very pleased with this acquisition,” said Roadway chairman Michael W. Wickham. “As a part of our overall strategy, we were looking for an opportunity to enter the next-day, ground market. New Penn Motor Express provides us with a well-developed and proven model to accomplish our immediate objectives and begin a new stage in our growth strategy."
“The Roadway acquisition provides a fair value to Arnold Industries shareholders while protecting the employees of our companies and ensuring continued high-quality service,” E.H. Arnold said. It is with these thoughts in mind that I wholeheartedly support this transaction."
Credit Suisse First Boston has provided Roadway a commitment of up to $700 million to finance the acquisition, and to provide for future working capital needs, subject to customary conditions.
Akron, OH-based Roadway, with revenues of $3.05 billion, is the parent of LTL and freight service provider Roadway Express. Arnold Transportation Services, headquartered in Jacksonville, FL, provides irregular route and dedicated truckload services.