OVERLAND PARK, KAN. and CHICAGO — Yellow Roadway Corp. has entered into a definitive agreement to acquire USF Corp. The sale is valued at approximately $1.37 billion. Yellow Roadway will also assume an expected $99 million in net USF debt, resulting in a total enterprise value of approximately $1.47 billion.
The acquisition, which is expected to close in summer 2005, will further advance Yellow Roadway as one of the leading transportation services companies in the world. The combined enterprise is expected to have annual revenue in excess of $9 billion, with more than 70,000 employees and 1,000 service locations. In addition, the combined entity will offer customers a broad range of transportation services including next day, inter-regional, national and international capabilities.
This is a case of opportunity knocking twice,” said Bill Zollars, chairman, president and CEO of Yellow Roadway. “USF represents an excellent opportunity to leverage the successful strategy that was employed with Roadway. When applied to USF, this includes maintaining the strong separate brand identities, customer interfaces and distinct operations of each business unit.”
Upon the closing of the transaction, the following individuals will lead the key divisions of the combined entity and report directly to Zollars:
Jim Staley, current president of the Roadway Group, will become president of the Yellow Roadway regional companies which will include New Penn Motor Express, USF Holland, USF Reddaway, USF Dugan and USF Bestway. Staley will also be responsible for the truckload unit of USF, Glen Moore.
Bob Stull, who currently reports to Jim Staley as president of Roadway Express, will continue in that role and report directly to Zollars.
James Welch, president of Yellow Transportation, will continue in that role.
Jim Ritchie will continue as president of Meridian IQ, the logistics unit of Yellow Roadway, which will include the operations of USF Logistics.
Mike Smid will remain as president of Yellow Roadway Enterprise Services and Chief Integration Officer.
It is anticipated that one current member, to be determined, of the USF board of directors will join the Yellow Roadway board of directors upon the closing of the acquisition.
USF shareholders have the right to elect for each share either $45 in cash or 0.9024 shares (a fixed exchange ratio) of Yellow Roadway common stock. All shareholder elections will then be adjusted such that the gross cash consideration will total approximately $639 million (based on the USF shares currently outstanding) and the balance will be paid in stock.
The financial and legal advisors for Yellow Roadway were Integrated Finance Limited and Fulbright & Jaworski L.L.P., respectively. The financial and legal advisors for USF were Morgan Stanley and Sullivan & Cromwell LLP, respectively.
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