Yellow Roadway heads to China, repurchases stock

Sept. 20, 2005
Overland Park, KS-based Yellow Roadway Corp. has finalized a new transportation joint venture in China and is launching a stock buyback plan to help bolster its future international expansion efforts

Overland Park, KS-based Yellow Roadway Corp. has finalized a new transportation joint venture in China and is launching a stock buyback plan to help bolster its future international expansion efforts.

Yellow Roadway and Shanghai Jin Jiang International Industrial Investment Co. are forming a China-based joint venture to offer freight and logistics service into the Asian nation. The terms call for both Yellow Roadway and Jin Jiang Investment to own 50% of the new venture, JHJ International Transportation Co., Ltd. – now the second largest airfreight forwarder in China.

JHJ also offers ocean freight forwarding and logistics services through a domestic network of 25 locations, including five customs warehouses adjacent to the Shanghai Pudong International Airport. JHJ, who employs over 1,100 people, said it earned revenue of $330 million in 2004. Yellow Roadway is investing $45 million for its 50% equity stake and said it and Jin Jiang would be equally represented on the board of directors of the joint venture.

On top of that, Yellow Roadway’s Meridian IQ subsidiary and Jin Jiang Investment also plan to form a new logistics joint venture, with Meridian initially owning 75% and investing $7.5 million over three years, with Jin Jiang owning 25%, of Meridian IQ Jin Jiang Logistics Co., Ltd. That deal is expected to wrap up next year.

To keep its overseas investments humming, Yellow Roadway is going forward with a stock repurchase program that authorizes the company to repurchase up to $50 million of its common shares.

“This [stock repurchase] program reflects our confidence in the strategy of Yellow Roadway and the belief that our stock is significantly undervalued in the market,” stated Bill Zollars, the company’s chairman, president and CEO. “As we continue to progress toward our targeted $450 million in combined synergies, we believe our results will reflect the long-term value to shareholders.”

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