Wednesday 22 March 2023

US-based freight transportation provider Knight-Swift Transportation Holdings Inc. (NYSE: KNX) has agreed to acquire Tennessee-based transportation company US Xpress Enterprises, Inc. (NYSE: USX) for a total enterprise value of approximately USD808 m, the company said.

In the transaction, US Xpress stockholders will receive USD 6.15 per share in cash for each outstanding share of US Xpress class A and class B common stock, except Max Fuller, Executive chairman of US Xpress, and Eric Fuller and related entities will rollover a portion of their shares of US Xpress into an approximately 10% interest in a new Knight-Swift subsidiary formed to hold the US Xpress business post-closing.

The total enterprise value of USD 808m for US Xpress represents Knight-Swift assuming US Xpress' USD 484m of outstanding debt and finance leases and purchasing its outstanding equity for USD324 m, or USD 6.15 per share, and excludes its USD 336m of operating lease liabilities

Knight-Swift expects to repay and terminate the US Xpress secured revolving credit facility at closing while seeking to retain in place US Xpress' existing primarily fixed-rate equipment and real estate financing arrangements. Knight-Swift had approximately USD1.3 bn unrestricted cash and available liquidity on December 31, 2022, a portion of which will fund the transaction.

The transaction is not conditioned on financing and is subject to regulatory and other customary conditions, including approval of holders of a majority of the voting power of the outstanding shares of US Xpress class A and class B common stock voting together, approval of holders of a majority of the outstanding shares of each class of US Xpress common stock, voting separately, and approval of holders of a majority of all outstanding US Xpress' shares not held by the Fullers, the officers and directors of US Xpress, or Knight-Swift.

US Xpress will continue to operate as an independent brand and will do so with the support and partnership of Knight-Swift.

Scudder Law Firm, P.C., L.L.O. of Lincoln, Nebraska served as Knight-Swift's transaction and legal advisor, and Fried, Frank, Harris, Shriver & Jacobson LLP served as its legal advisor in connection with the transaction.

J.P. Morgan Securities LLC served as exclusive financial advisor to the Special Committee of independent directors of the US Xpress board of directors, and King & Spalding LLP served as its legal advisor. Holland & Hart LLP served as legal advisor to the Fuller family.