Swift Transportation Co. has entered a definitive merger agreement with Jerry Moyes, Swift's original founder and largest shareholder, in an all-cash transaction of some $2.74 billion.
Under the terms of the agreement Swift stockholders will receive $31.55 in cash for each outstanding share of Swift common stock, a premium of 31% from its closing price on November 3. The transaction also includes the assumption of approximately $332 million of debt.
The deal will take the publicly traded truckload giant private— and cast a pall over the fate of its management.
Moyes had served as chairman & CEO for nearly four decades until he decided to step down from both executive positions in October 2005 after settling a lawsuit brought by the Security and Exchange Commission for $1.26 million in 2004. He had been accused of insider trading. His leadership also stumbled when Freightliner sued Swift for $10 million in 2002 over alleged over-billing of warranty work. He also engineered a merger with truckload rival M.S. Carriers in 2000 that forced Swift to take charges against earnings in ensuing years to recoup losses from M.S.’s Mexican operations.
“The Swift senior management might have mixed feelings about working for Jerry again,” analyst Satish Jindel, president of S.J. Consulting told FleetOwner. “Now, with the company being taken private, it may undertake new initiatives in terms of revenue margins,” he said, adding that Moyes will have plenty of latitude to operate the company as he pleases without investor scrutiny.
The transaction will also result in Swift’s competitors having “less awareness of changes that are going about for the company,” Jindel said.
Swift’s board of directors announced it rejected Moyes’ offer of $29 per share in November, which opened the door to a bidding war. But recent developments “indicate [Swift] didn’t have any other potential buyers to offer that much or better,” Jindel said.
“Swift, which I founded in 1966 as a small company with a strong entrepreneurial spirit, has evolved into the operator of the largest truckload fleet in the United States with a dedicated and energetic team of employees, over 17,900 trucks and nearly $3.2 billion in revenues,” Moyes said. “I am extremely pleased to have reached this agreement with Swift and look forward to building on the unique Swift legacy that has positioned the company for growth and success.”
The transaction is expected to be completed in the second quarter.
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