Knight-Swift to Purchase U.S. Xpress
In what might be the largest business deal in the trucking industry that we will see this decade, Knight-Swift, one of the largest fleets in the nation, has decided to purchase U.S. Xpress, a smaller but still significantly large truck fleet, to the tune of $800 million.
Acquisition Details
Knight-Swift is acquiring the smaller company in the most basic and standard way possible: as a publicly traded company, U.S. Xpress shares represent ownership that can be bought or sold by just about anyone willing to pay for them.
Knight-Swift is offering $6.15 per share of U.S. Xpress stock, an extremely large sum when considering that the stock was trading at less than $2 per share prior to the announcement.
“Although it will take time, particularly given the current freight environment, we would not have pursued the transaction unless we were confident in achieving our return thresholds within a few years,” CEO of Knight-Swift Dave Jackson said in a statement. “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.”
Knight-Swift is in ownership of an estimated 24,900 vehicles, with the number to be increased by another 7,200 should this merger go through. Despite the ownership of such a substantial fleet, making it the third-largest fleet in the nation behind Ryder and FedEx, the larger Knight-Swift would still be less than one percent of the estimated total number of big rigs on America’s roads, at a whopping four million.
Conclusion
The deal is not finalized yet, as it has to go through a boatload of federal regulations to become finalized, including on the transportation side, the business side, and the monetary side, but industry experts on all sides have said it is likely to go through without a problem and become a single entity by the start of 2024.
The only question that remains is what the name of the new company will be. Our hypothetical vote is for Swift-U.S.-Knight, with a man in armor riding atop a bald eagle. We can only hope!
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