Knight-Swift to Acquire U.S. Express for $808 Million

Phoenix-based Knight-Swift Transportation, the fifth largest trucking company in the U.S., has agreed to acquire competitor Chattanooga, Tennessee-based U.S. Express Enterprise Inc. for $808 million. The deal will pay U.S. Express investors $6.15 a share, well above their current market closing price of $1.50.

U.S. Express will keep its brand and would add about $2.2 billion in revenues this year to Knight-Swift. The acquisition would increase KnightSwift’s run rate to about $10 billion a year. The deal brings with it more than 6,000 vehicles which would be added to the company’s 25,000 commercial trucks on the road.

As recently as last April, shares in the company were valued at $5.44, but U.S. Express has fallen on hard times lately with high insurance claims and dropping volume. They recently launched a restructuring plan that would cut $25 million in costs per year.

“Although it will take time, particularly given the current freight environment, we would not have pursued the transaction unless we were confident in achieving our return thresholds within a few years,” said Knight-Swift CEO Dave Jackson in a press release.

“Beyond that, we will continue to work with the U.S Xpress team in pursuit of the performance levels of our other truckload businesses over the next several years, so the opportunity for our stockholders is substantial,” added Jackson.

U.S. Express leadership, CEO Eric Fuller and CFO Eric Peterson will leave their current roles but will be available to help with the transition. U.S. Express was founded in 1896 by Max Fuller and Patrick Quinn.

Knight-Swift was formed during a 2017 merger between Knight Transportation and Swift Transportation, rising to become one of the top freight companies in the U.S. Jackson and his team are looking to create a return on investment of about 15%. That would implementing Knight-Swift’s systems and best practices.