Knight-Swift to acquire U.S. Xpress Enterprises for $6.15 per share

Knight-Swift (KNX) and U.S. Xpress Enterprises (USX) announced an agreement under which Knight-Swift will acquire U.S. Xpress for a total enterprise value of approximately $808M, excluding transaction costs. The transaction has been unanimously approved by the board of directors of Knight-Swift and a special committee of the independent directors of the U.S. Xpress board of directors. It is expected to close late in the second quarter or early third quarter of 2023, subject to customary closing conditions. In the transaction, U.S. Xpress stockholders will receive $6.15 per share in cash for each outstanding share of U.S. Xpress Class A and Class B common stock, except Max Fuller, executive chairman of U.S. Xpress, and Eric Fuller and related entities will rollover a portion of their shares of U.S. Xpress into an approximately 10% interest in a new Knight-Swift subsidiary formed to hold the U.S. Xpress business post-closing. The rollover interests will be subject to optional and mandatory redemption provisions based on the future performance of the U.S. Xpress business post-closing. As minority owners in the future U.S. Xpress, the Fullers have agreed to certain restrictive covenants. The total enterprise value of $808M for U.S. Xpress represents Knight-Swift assuming U.S. Xpress’ $484 million of outstanding debt and finance leases and purchasing its outstanding equity for $324 million, or $6.15 per share, and excludes its $336 million of operating lease liabilities for the purposes of this calculation. As of December 31, 2022, U.S. Xpress had approximately $96M in outstanding borrowings under its secured revolving credit facility and $388 million in other long-term debt and finance leases. Knight-Swift expects to repay and terminate the U.S. Xpress secured revolving credit facility at closing while seeking to retain in place U.S. Xpress’ existing primarily fixed-rate equipment and real estate financing arrangements. Knight-Swift had approximately $1.3B unrestricted cash and available liquidity on December 31, 2022, a portion of which will fund the transaction.