FedEx Corp. has announced an agreement to acquire Parcel Direct for $120 million in cash.

Parcel Direct -- a division of Quad/Graphics -- is a leading parcel consolidator and will add a new dimension to the FedEx portfolio of services. The transaction is expected to close during the second fiscal quarter.
Parcel Direct will be a subsidiary of FedEx Ground and will offer a proven solution to customers in the fast-growing e-tail and catalog industries. These customers are increasingly seeking a cost-effective means of shipping low-weight, less time-sensitive goods to residential customers.
"This acquisition is consistent with our long-standing strategy to acquire leading businesses that meet emerging market needs," said Daniel J. Sullivan, president and chief executive officer of FedEx Ground. "We are confident that we can aggressively grow this new business by combining Parcel Direct's cost-effective and scalable network with FedEx sales, marketing and financial resources."
Parcel Direct, based in New Berlin, Wis., has about 450 employees and generated approximately $250 million of gross revenue in 2003 ($130 million in net revenue). Parcel Direct has developed a successful model for parcel consolidation tailored to meet the needs of targeted high-volume shippers The model is based on a low-cost, highly efficient network specifically designed to take advantage of the United States Postal Service's Parcel Select service.
Each day thousands of packages are transported from customers' facilities to one of 12 Parcel Direct sorting locations in the United States. Packages are sorted and consolidated at these locations and then transported to local Post Offices for ultimate delivery to residential customers by more than 300,000 United States Postal Service mail carriers. This service is an optimum choice for customers shipping large volumes of low-weight, less time-sensitive packages and will further enhance FedEx Ground's service offerings.