UPS to acquire Overnite for $1.25 billion in cash

The Trucker News Services

5/16/2005

ATLANTA — UPS and Overnite Corp. on May 16 jointly announced a definitive agreement for UPS to acquire Overnite for $43.25 per share, or approximately $1.25 billion in cash, according to a news release issued by UPS.

The transaction will allow UPS to expand its service portfolio by offering a variety of less-than-truckload (LTL) and truckload (TL) services to its North American customers, the release said. It also will immediately position UPS as a top U.S. LTL carrier and comes just five months after the company expanded its air freight services by acquiring Menlo Worldwide Forwarding.

The acquisition, expected to close during the third quarter of 2005, is an all-cash transaction that will require regulatory approvals and the approval of Overnite's shareholders. The Overnite Board of Directors has unanimously approved the agreement and recommended approval by its shareholders.

Based in Richmond, Va., Overnite reported net income of $63.3 million in 2004 on revenue of $1.65 billion. The carrier serves more than 60,000 customers in the LTL and TL segments with operations in the U.S., Canada, Mexico, Puerto Rico, Guam and the U.S. Virgin Islands.

"Overnite is a perfect strategic fit for our company," Mike Eskew, UPS chairman and CEO, said. "We want to offer our customers the broadest portfolio of transportation and logistics services available from a single source and this is an important capability that we needed to have.

"Overnite is a successful, well-run company with excellent growth prospects and has a strong culture and world-class employee base that complement our organization."

Overnite's management team is expected to remain in place to run the business.

"This is an exciting time for Overnite and its customers and employees," Leo Suggs, Overnite's chairman, CEO and president, said. "We are pleased that UPS recognizes our commitment to quality service, our broad nationwide coverage and a trained and motivated workforce. We are confident in our ability to help UPS broaden its diverse service portfolio to its customers."

With the addition of Overnite, UPS will become a top motor freight carrier with expanded services that will help customers more easily synchronize the movement of goods, information and funds. The single-source solutions offered by UPS now will include a full suite of heavy freight services via air, ground and ocean.

Overnite Corp. is one of America's leading less-than-truckload carriers with a 70-year heritage. Its principal operating company, Overnite Transportation Co., operates in all 50 states, Canada, Puerto Rico, Guam, the U.S. Virgin Islands and Mexico. Its other operating company, Motor Cargo, is a regional less-than-truckload carrier primarily serving the western United States, Canada and Mexico. Together, they form one of the largest less-than-truckload carriers in the United States with over 200 service centers and 14,200 employees.

UPS is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, UPS serves more than 200 countries and territories worldwide.

--The Trucker Staff