FedEx Corp. announced that it has acquired the less-than-truckload operations of Watkins Motor Lines and certain affiliates for $780 million, payable in cash. The transaction is expected to close during the first quarter of fiscal 2007 and is subject to customary conditions, including government approvals. The acquisition is not expected to have a material effect on the fiscal 2007 financial results of FedEx, the company said.
Watkins Motor Lines, a privately held company headquartered in Lakeland, Fla., is a provider of longhaul LTL services with more than $1 billion in annual revenue. FedEx said that Watkins will be rebranded FedEx National LTL and operate as a separate network within the FedEx Freight segment. The addition of Watkins’ three-day or more longhaul service to FedEx Freight’s next-day and second-day regional LTL service will help FedEx’s position in the freight sector, the company said.
As part of the transaction, announced Friday, May 26, FedEx also has agreed to acquire the assets of Watkins’ business in Canada, Watkins Canada Express. Watkins Canada Express will be rebranded FedEx Freight Canada and will extend FedEx Freight’s reach in the market and create opportunities for growth.
“This acquisition will extend our leadership position in the heavy freight sector and provide new growth opportunities for the business,” said Frederick W. Smith, chairman, president and chief executive officer of Memphis, Tenn.-based FedEx Corp. “Our customers have increasingly asked us to provide a broader range of transportation and supply chain services, and as a result of this acquisition, we will be in a better position to meet their expectations.”
Watkins management will remain in place, with Chip Watkins serving as president. He will report to Patrick L. Reed, executive vice president and chief operating officer of FedEx Freight, who has responsibility for all U.S. LTL operations.