U.S. Xpress Enterprises, Inc. (NYSE: USX) is a Chattanooga, Tennessee-based trucking and logistics company, which operates a network of 14 facilities primarily across the eastern United States. The company’s trucking fleet is comprised of 7,200 tractors and 14,400 trailers. Shares of the transportation company are skyrocketing 300% through early trading on Tuesday, March 21, 2023. Over the past three months, U.S. Xpress has seen average daily volume of 267,150 shares. However, volume of 8.95 million shares or dollar volume of around $53.52 million, has already exchanged hands through early trading.
Shares of U.S. Xpress are soaring after the company announced it has entered into an agreement to be acquired by Knight-Swift Transportation Holdings, Inc. (NYSE: KNX) for $808 million, excluding transaction costs. The deal was approved by Knight-Swift’s Board of Directors, as well as a Special Committee of independent directors from the U.S. Xpress Board of Directors. The transaction is estimated to close during the late second quarter of early third quarter of 2023.
Under the terms of the deal, U.S. Xpress shareholders would receive $6.15 per share in cash for each outstanding share of Class A & B common stock. The transaction gives the trucking company a total enterprise value of $808 million.
The acquisition is expected to be a boon for Knight-Swift Transportation, which estimates its revenue growing by around 30%. The Knight-Swift management team sees the potential for high-80s adjusted operating ratio and a mid-teens return on invested capital for U.S. Xpress by calendar 2026. Knight-Swift says the transaction is estimated to be accretive to its bottom line starting in 2024.
Post-closing of the transaction, U.S. Xpress will continue to operate as a separate brand under the Knight-Swift umbrella to help minimize disruptions. However, management says they will be developing cross-functional teams from the different brands to meet and work to leverage economies of scale.
U.S. Xpress CEO, Eric Fuller, said: “We are very pleased to deliver to our stockholders the opportunity for near-term liquidity at a significant premium. Additionally, joining the Knight-Swift team is an exciting opportunity for our people, our customers, and the Chattanooga and other communities we call home. The increased scale, operating expertise and resources of the combined entity will allow U.S. Xpress to pursue new levels of service and efficiency. We’re delighted that U.S. Xpress will continue to operate as an independent brand and will do so with the support and partnership of one of North America’s strongest transportation companies.”
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