Overnite Transportation plans to purchase LTL carrier Motor Cargo Industries of Salt Lake City, UT. With approximately 6.5-million shares of Motor Cargo outstanding, the total transaction value is estimated at approximately $80 million based on current stock prices, Overnite said.
The merger agreement will be accomplished primarily via a stock swap, said Overnite. Motor Cargo shareholders may elect to tender their shares for either cash, at $12.10 per share, or shares of Union Pacific stock, at an exchange ratio of 0.26 shares of Union Pacific stock for each share of Motor Cargo stock. Motor Cargo shareholders who do not tender their shares will receive $12.10 per share in cash in the second-step merger. The offer is expected to be completed by the end of the year, Overnite added.
Motor Cargo is a regional LTL carrier providing service throughout 10 western states, whereas Overnite provides nationwide LTL regional, inter-regional and long-haul service in 32 states east of the Rockies.
Hal Tate, CEO and majority shareholder of Motor Cargo, and a second shareholder have agreed to tender their aggregate 63% ownership, said Overnite, with Tate committed to taking shares of Union Pacific stock.