M.S. Carriers, Memphis, Tenn., will become a wholly owned subsidiary of Phoenix-based Swift Transportation in a merger the two companies announced late yesterday.
The combination will create the largest and most profitable North American truckload motor carrier, according to the announcement, with more than $2 billion in pro forma 2000 revenue, 15,000 tractors, and service in Mexico, Canada and throughout the United States.
In the merger, 1.7 shares of Swift common stock will be exchanged for each share of M.S. Carriers' common stock. At Swift's closing price Monday, M.S. Carriers stockholders would receive approximately $34.32 for each share of M.S. Carriers' common stock, a premium of more than 52% over Monday's closing price of M.S. Carriers' common stock.
At those prices, Swift's post-merger market capitalization would be approximately twice as great as the next largest publicly traded truckload carrier.
Although the merger agreement has been approved by the boards of directors of both companies, it is subject to antitrust clearance and stockholder approval.
Both Jerry Moyes, the chief executive officer and largest stockholder of Swift, and Michael S. Starnes, the CEO and largest stockholder of M.S. Carriers, have agreed to vote their shares in favor of the merger. The companies expect the merger to be completed in the spring of 2001.
"For several years, we have believed that M.S. Carriers offered the best strategic fit of any potential merger partner," said Swift's Chairman, President, and CEO, Jerry Moyes. "Operationally, both companies focus on short-to-medium length of haul, regional operations. Swift is stronger in the western United States, while M.S. Carriers operates primarily in the eastern United States and in Mexico."
Moyes said there is little overlap among the companies' top customer accounts. Also, Swift plans to capitalize on M.S. Carriers' greater investment in technology.
Moyes says the merger also demonstrates the companies' commitment to Transplace.com. Swift and M.S. Carriers were both founding members of the Internet-based global transportation logistics and e-procurement company formed last spring by six of the seven largest publicly-traded truckload carriers.
"With the merger, Swift's and M.S. Carriers' combined 30% share will represent the largest ownership interest in Transplace," Moyes said.
Starnes will continue as the President and CEO of M.S. Carriers and will be responsible for coordinating the operations of M.S. Carriers with Swift's operations in the eastern United States, Mexico and Canada.
"I believe the merger offers a unique opportunity to create a combined company that can be greater than the sum of its parts," Starnes said. "That is why I agreed to it. I am confident that Jerry Moyes and I will work very well in bringing our two great companies together."
The companies expect to continue the M.S. Carriers operations out of Memphis with existing management and other personnel remaining in place. For the near term, M.S. Carriers will operate independently, as the companies focus on cost savings through purchasing economies, lower borrowing rates, and the increased use of lower-priced bulk fuel available at Swift's facilities.
Over time, the companies will analyze traffic lanes, terminal locations, and equipment positions to find ways to increase productivity and minimize empty miles. The companies also may move or consolidate certain administrative functions in Phoenix or Memphis.
Swift can be reached on the Web at www.swifttrans.com, and M.S. Carriers' web address is www.mscarriers.com.
The combination will create the largest and most profitable North American truckload motor carrier, according to the announcement, with more than $2 billion in pro forma 2000 revenue, 15,000 tractors, and service in Mexico, Canada and throughout the United States.
In the merger, 1.7 shares of Swift common stock will be exchanged for each share of M.S. Carriers' common stock. At Swift's closing price Monday, M.S. Carriers stockholders would receive approximately $34.32 for each share of M.S. Carriers' common stock, a premium of more than 52% over Monday's closing price of M.S. Carriers' common stock.
At those prices, Swift's post-merger market capitalization would be approximately twice as great as the next largest publicly traded truckload carrier.
Although the merger agreement has been approved by the boards of directors of both companies, it is subject to antitrust clearance and stockholder approval.
Both Jerry Moyes, the chief executive officer and largest stockholder of Swift, and Michael S. Starnes, the CEO and largest stockholder of M.S. Carriers, have agreed to vote their shares in favor of the merger. The companies expect the merger to be completed in the spring of 2001.
"For several years, we have believed that M.S. Carriers offered the best strategic fit of any potential merger partner," said Swift's Chairman, President, and CEO, Jerry Moyes. "Operationally, both companies focus on short-to-medium length of haul, regional operations. Swift is stronger in the western United States, while M.S. Carriers operates primarily in the eastern United States and in Mexico."
Moyes said there is little overlap among the companies' top customer accounts. Also, Swift plans to capitalize on M.S. Carriers' greater investment in technology.
Moyes says the merger also demonstrates the companies' commitment to Transplace.com. Swift and M.S. Carriers were both founding members of the Internet-based global transportation logistics and e-procurement company formed last spring by six of the seven largest publicly-traded truckload carriers.
"With the merger, Swift's and M.S. Carriers' combined 30% share will represent the largest ownership interest in Transplace," Moyes said.
Starnes will continue as the President and CEO of M.S. Carriers and will be responsible for coordinating the operations of M.S. Carriers with Swift's operations in the eastern United States, Mexico and Canada.
"I believe the merger offers a unique opportunity to create a combined company that can be greater than the sum of its parts," Starnes said. "That is why I agreed to it. I am confident that Jerry Moyes and I will work very well in bringing our two great companies together."
The companies expect to continue the M.S. Carriers operations out of Memphis with existing management and other personnel remaining in place. For the near term, M.S. Carriers will operate independently, as the companies focus on cost savings through purchasing economies, lower borrowing rates, and the increased use of lower-priced bulk fuel available at Swift's facilities.
Over time, the companies will analyze traffic lanes, terminal locations, and equipment positions to find ways to increase productivity and minimize empty miles. The companies also may move or consolidate certain administrative functions in Phoenix or Memphis.
Swift can be reached on the Web at www.swifttrans.com, and M.S. Carriers' web address is www.mscarriers.com.
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