TransForce wins Dynamex bidding war in $248M deal

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Updated Dec 16, 2010

Dynamex Inc., a provider of same-day delivery and logistics services in the United States and Canada, announced Tuesday, Dec. 14, that it had terminated the merger agreement previously entered into with an affiliate of Greenbriar Equity Group and had entered into a new merger agreement with TransForce, ending a bidding war for the Dallas-based company.

TransForce agreed to acquire Dynamex for $25 per share in cash, which represents a 63.29 percent premium to the company’s closing share price on Oct. 1 and a 4.17 percent premium over the consideration provided by the amended merger agreement previously entered into with the Greenbriar affiliate.

Dynamex said its board of directors unanimously approved the merger agreement with TransForce and will recommend that the company’s stockholders adopt the merger agreement. Completion of the transaction, which is valued at about $248 million, is subject to certain conditions and is expected to close in the first quarter of 2011.

“TransForce’s growth strategy is to acquire well-managed companies that are leaders in their market and effectively oversee their performance,” said James Welch, chief executive officer of Dynamex. “The merger will allow for greater stability, focus and flexibility for Dynamex to achieve its strategic goals and growth. Dynamex will benefit from TransForce’s experience, support and synergies by interacting with other companies of the group, increasing its geographic reach, and by allowing it to provide complementary services, and improve its market penetration.”

Dynamex had announced Tuesday, Dec. 7, that an “excluded party” who attempted to outbid its original buyer was making a second acquisition attempt. Terms of the new deal were to be finalized by 11:59 a.m. ET on Tuesday, Dec. 14. Prior to that time, the original contender for Dynamex – DashNow Holding Corp., a Delaware corporation and a Greenbriar affiliate – was to be allowed to have another opportunity to submit another higher offer and its third offer overall. Since DashNow now has decided not to up the ante again, Dynamex will have to pay the holding corporation a breakup fee of more than $7.7 million.

Dynamex on Nov. 30 had accepted DashNow’s second offer of $24 per share, which surpassed the $23.50 offer made Nov. 23 by the “Takeover Party” when it first attempted to outbid DashNow. Under terms of the original transaction with DashNow announced Oct. 1, Dynamex shareholders would have received $21.25 per share.

Greenbriar is a transportation and logistics-focused private equity firm with $1.5 billion of capital under management. The original transaction, with a value of about $210 million, was approved unanimously by the Dynamex board. After the initial buyout offer was announced, several law firms launched investigations into whether Dynamex’s board adequately shopped the company before entering into the transaction with DashNow and whether the transaction undervalued Dynamex.

The TransForce acquisition has sparked yet another round of probes by law firms investigating members of the Dynamex board for potential breaches of fiduciary duties in connection with their conduct related to the TransForce transaction, saying it undervalues Dynamex.