Simon Transportation's founder and Swift Transportation chief Jerry Moyes have reached an agreement for Moyes to get a bigger stake in the company and replace Simon's founder as chairman of the board.
Simon founder Richard D. Simon, Chairman of the Board and Chief Executive Officer, has reached an agreement with Moyes for Moyes to buy all Simon's Class B Common Stock for $9 per share. The shares of Simon Class B Common Stock entitle Richard D. Simon and his family members to two votes per share, but will entitle Moyes to only one vote per share.
Under the proposal, Simon will retain the Class A Shares he currently owns and will remain a director of the Company. Company executives Kelle A. Simon, Alban Lang, Lyn Simon, Sherry S. Bokovoy and Richard D. Simon, Jr., will continue to serve as executive officers of the Company and will retain their shares of Class A Common Stock. If the transaction is completed, Mr. Moyes would become Chairman of the Board and Jon Isaacson would become Chief Executive Officer and Chief Operating Officer.
"We are excited about the company's prospects and the industry experience and financial skills that Mr. Moyes will bring to our Board," said Simon. "We believe the company will benefit from his insight and advice." Simon also noted that the purchase price for the Class B Common Stock was reached after extended negotiations between the parties, and reflects a number of factors, including the double voting rights of the Class B Common Stock in the hands of Mr. Simon, valuations provided by third-party financial advisors and the company's current book value, which is in excess of $9 per share.
The transaction is subject to satisfaction of a number of conditions, including completion of due diligence, and approval of the terms of a consulting and non-competition agreement between the company and Mr. Simon, and employment and non-competition agreements between the company and other executive officers. The transaction is also subject to the company's issuance to Moyes of a warrant to purchase up to 300,000 additional shares of Simon Class A Common Stock at a price of $7 per share.
Simon Transportation, Salt Lake City, is a truckload carrier providing nationwide, predominantly temperature-controlled transportation services for major shippers.