On Friday, ground transportation and logistics services company, Forward Air Corp. (NASDAQ: FWRD) plunged more than 20% following concerns raised by Wall Street analysts regarding the company’s $3.2 billion acquisition of Omni Logistics.
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Today, the company again reiterated the value creation potential of the acquisition. Forward Air stated that the combination is expected to generate up to $125 million of total run-rate EBITDA synergies (excluding around $36 million of non-recurring costs to achieve those synergies). This includes up to $75 million of potential run-rate cost synergies, up to 80% of which are expected to be realized within the first six months following the close of the acquisition. The remainder of these cost synergies are projected to be realized by the end of 2025.
Forward Air stated in its press release that, “total synergies also include up to $50 million in positive revenue-based EBITDA synergies, approximately 60% of which would be realized in the 24 months post-close of the transaction.”
The company expects the acquisition to be 5% dilutive to cash EPS next year (the first full year after closing) and is likely to be highly accretive in 2025, “delivering accretion of 9% based on projected realized synergies.”
The acquisition is expected to close later this year.
Analysts are sidelined about FWRD stock with a Hold consensus rating based on two Buys, two Holds, and one Sell.
