US truck­ing gi­ants merge

New Zealand Truck & Driver - - Contents -

TWO OF THE UNITED STATES’ BIG­GEST TRUCK­ING com­pa­nies, Knight Trans­porta­tion and Swift Trans­porta­tion, are merg­ing into a $US6­bil­lion ($NZ8.58bn) su­per-op­er­a­tor.

An­a­lysts say it’s the big­gest deal in US truck­ing his­tory, cre­at­ing North Amer­ica’s big­gest truck­load trans­porta­tion com­pany, worth $US6­bil­lion and gen­er­at­ing $5bn in an­nual rev­enue.

Both busi­nesses are based in Phoenix, Ari­zona, and their founders – Kevin Knight and Swift’s Jerry Moyes – are close friends. In fact, Knight be­gan his ca­reer with Swift.

e eets will each con­tinue to op­er­ate un­der their ex­ist­ing names and brands, but will be owned by a new hold­ing com­pany, which will also be head­quar­tered in Phoenix.

It will own around 23,000 trac­tors units, and 77,000 trail­ers, and em­ploy 28,000 sta .

Kevin Knight, who will be­come ex­ec­u­tive chair­man of the com­bined busi­ness, “is known as one of, if not THE best op­er­a­tor in the truck­load in­dus­try,” says Stifel Fi­nan­cial lo­gis­tics an­a­lyst John Larkin in a re­port to in­vestors.

And Larkin adds: “E ec­tively, this deal rep­re­sents the pupil ac­quir­ing the teacher’s com­pany and will give the Knight team con­trol of the new en­tity.”

e an­a­lyst says that Swift has strug­gled since Moyes re­tired late last year. e son of a truck driver, he founded the com­pany in 1966 and is de­scribed by Larkin as its “spir­i­tual leader.”

Larkin has told in­vestors that he be­lieves that Knight “will add some op­er­at­ing dis­ci­pline and strate­gic di­rec­tion to the Swift or­gan­i­sa­tion.”

e deal will al­low both com­pa­nies to com­pete with in­dus­try gi­ant Sch­nei­der Na­tional, which raised $US550mil­lion in its ini­tial pub­lic share o er­ing days be­fore the Knight/Swift deal was an­nounced.

Al­though the com­pa­nies say that the deal is a merger, Knight is legally ac­quir­ing Swift and its share­hold­ers will have 54% of the merged com­pany.

But Moyes, the con­trol­ling share­holder of Swift, will re­main the sin­gle big­gest share­holder in the merged com­pany, own­ing about 24% of it.

“I can­not think of a bet­ter com­bi­na­tion,” Moyes says: “ e Knight and Moyes fam­i­lies grew up to­gether, and the Knights helped me build Swift be­fore start­ing their own com­pany and mak­ing it an in­dus­try leader in growth and pro tabil­ity.

“I’m con dent that we have the right ap­proach to max­imis­ing the con­tri­bu­tion of both teams, and I look for­ward to help­ing the KnightSwift lead­er­ship team in any way I can to con­tinue the legacy of both great com­pa­nies.”

Knight ex­ec­u­tive chair­man Kevin Knight says that the merger dis­cus­sions had four goals: “Cre­ate a com­pany with the best strate­gic po­si­tion in our in­dus­try; iden­tify signi cant re­al­is­able syn­er­gies that would cre­ate value for both sets of stock­hold­ers; cre­ate a busi­ness that over the longterm will op­er­ate at Knight’s his­tor­i­cal mar­gins and nan­cial re­turns; and agree on a lead­er­ship and cor­po­rate gov­er­nance frame­work that will bene t all stake­hold­ers. I’m con dent we have achieved those goals.”

Swift Trans­porta­tion has a eet of about 18,000 trucks, driven by com­pany and third-party driv­ers, and it op­er­ates more than 40 truck­ing ter­mi­nals in the US and Mex­ico.

Knight Trans­porta­tion has about 5000 em­ploy­ees and op­er­ates a eet of more than 4000 trucks.

T&D

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