Two of the country’s largest trucking firms earlier this week announced they are merging. In addition, another major fleet staged a successful initial public offering.
Swift Transportation and Knight Transportation are becoming Knight-Swift Transportation Holdings Inc. in an all-stock deal expected to be finalized later this year pending government approval. Each will maintain its own identity, according to a statement from Knight today.
Knight-Swift will have 23,000 tractors, 77,000 trailers, and 28,000 employees. Swift reported over $4 billion in revenue for 2016, and Knight reported $1.1 billion.
Swift shareholders will own 54 percent of the company, while Knight shareholders will own the remaining 46 percent. The leadership team will consist of Kevin Knight, executive chairman; Gary Knight, vice chairman; Knight’s David Jackson, CEO; and Adam Miller, CFO.
Swift CEO Richard Stocking, and the company’s Chief Financial Officer Ginnie Henkels, “have chosen to pursue other opportunities following the closing of the transaction,” according to a statement on the Knight website.
In a statement today, Knight Executive Chairman, Kevin Knight said the companies had four goals in mind when merger discussions began:
- create a company with the best strategic position in our industry
- identify significant realizable synergies that would create value for both sets of stockholders
- create a business that over the long-term will operate at Knight’s historical margins and financial returns
- agree on a leadership and corporate governance framework that will benefit all stakeholders.
He said he was confident the deal achieved those goals.
In an interview with the Arizona Republic, Knight’s Jackson said:
“These are very much two independent brands, two independent operations and two different management teams, so the businesses will function more as sister companies under a parent while leveraging best practices from both.”
He said he expects both company to benefit from the economy of scale when it comes to purchasing, adding, “With 23,000 trucks, that is a lot of tires we buy, a lot of gallons of fuel,” he said.
The companies have team researching which operations should be combined and which will remain independent.
Schneider International’s IPO
Financial publications say a major fleet and a trucking technology company have had successful weeks raising capital.
The Wall Street Journal reports that Schneider International raised $550 million in an initial public offering (IPO) earlier this week. The company and shareholders of the Green Bay, Wisconsin-based fleet sold 29 million shares at $19 per share. The stock started trading Thursday, April 6, on the New York Stock Exchange under the symbol SNDR.
The Silicon Valley’s Peloton Technology, which is working on driver-assist technology including platooning, expects to raise $60 million in a Series B funding round. Fortune reports investors include Lockheed Martin, UPS Strategic Enterprise Fund, and Volvo Group Capital.