Swift Transportation Co. announced late Friday, Jan. 19, that it has entered into a definitive merger agreement with an entity formed by Jerry Moyes — the company’s largest shareholder, a current director and former chairman of the board and chief executive officer — pursuant to which Moyes and family members will acquire Swift in an all-cash transaction valued at about $2.74 billion. This includes the assumption of approximately $332 million of net debt.
Under the terms of the agreement, stockholders of Phoenix-based Swift will receive $31.55 in cash for each outstanding share of Swift common stock, which represents a premium of about 31 percent from the closing price of Swift stock on Nov. 3, the last trading day before Moyes made an initial proposal to acquire the company for $29 per share.
The transaction — subject to review by regulatory agencies under the Hart-Scott-Rodino Antitrust Improvements Act, approval by Swift stockholders and other customary closing conditions — is expected to be completed during the second quarter of 2007. Moyes has received commitments from Morgan Stanley for debt financing for the transaction.
“Swift, which I founded in 1966 as a small company with a strong entrepreneurial spirit, has evolved into the operator of the largest truckload fleet in the United States with a dedicated and energetic team of employees, over 17,900 trucks and nearly $3.2 billion in revenues,” Moyes said in a statement. “I am extremely pleased to have reached this agreement with Swift and look forward to building on the unique Swift legacy that has positioned the company for continued growth and success.”
Jock Patton, chairman of the company’s board of directors and chairman of the special committee, commented, “After careful consideration, and in close consultation with our financial and legal advisors, the special committee — which is composed of three of the board’s independent directors — and full board (other than Moyes) unanimously approved the transaction. We believe the all-cash $31.55-per-share price represents a fair value for the company and is in the best interest of all shareholders.”
Goldman, Sachs & Co. acted as financial adviser to the special committee, and Sullivan & Cromwell served as its legal advisers. Morgan Stanley acted as financial adviser to Moyes, and Skadden, Arps, Slate, Meagher & Flom and Scudder Law Firm acted as his legal advisers. Mayer, Browne, Rowe & Maw acted as legal advisers to Morgan Stanley.
Moyes originally sent a letter to Swift executives Nov. 6 notifying them of his intent to buy the company and take it private. With a total of 75.9 million shares outstanding, the total value of the offer was about $2.17 billion. In the letter, Moyes stated that the offer would remain on the table through Nov. 20. On Nov. 17, Moyes extended that deadline to Nov. 27 in a filing with the U.S. Securities and Exchange Commission.
