The boards of directors at Forward Air and Omni Logistics have approved the transaction, which is expected to close this year. (Forward Air Corp.)
Forward Air Corp. and Omni Logistics announced Aug. 10 that they have entered into a definitive agreement to combine in a cash-and-stock transaction.
Omni is a privately owned asset-light, high-touch logistics and supply chain management company headquartered in Dallas that is ranked No. 38 on the Transport Topics Top 100 list of the largest logistics companies in North America. Forward — ranked No. 27 on the for-hire TT100 — said the combined company will create a scaled, premier and high-value less-than-truckload enterprise focused on providing customers with multimodal service for complex, high-service and high-value freight needs.
“The combination of Omni with Forward creates a company positioned to achieve the full potential of our LTL business, provide a broad offering of complementary services to our customers and deliver meaningful value for our shareholders,” Forward CEO Tom Schmitt said. “It accelerates our ability to make high-value, competitively priced freight accessible to more customers, all of whom will benefit from Forward’s renowned precision execution.”
The board of directors at both companies have approved the transaction. It’s subject to regulatory approvals and the satisfaction of other customary closing conditions but is expected to close this year. Forward said the newly formed partnership will act as one of its subsidiaries. Both companies will contribute their operating assets to the new business.
Schmitt
Schmitt also plans to continue as chairman and CEO of the combined company once the deal closes. Omni CEO J.J. Schickel will serve as president and join its board of directors.
Omni shareholders will also designate three additional directors to join the board after the close of the transaction.
“Importantly, Forward and Omni already share a relentless focus on delivering best-in-class service to our customers, and we are excited to advance that reputation together,” Schmitt said. “We also believe the combination will allow us to unlock significant growth through enhanced scale, execution and operational synergies. We look forward to benefiting from Omni’s unique capabilities and expertise and to bringing even greater value into the expedited freight marketplace.”
Schickel
Schmitt added that bringing together the two companies is a key steppingstone of a growth strategy focused on high-value freight, developing an efficient operating network, implementing strategic pricing discipline and driving an expanded customer base.
“We are excited to have found in Forward a like-minded partner who shares our commitment to strong customer relationships and unrivaled service,” Schickel said. “I am very proud of what Omni accomplishes daily for our customers and am thrilled to bring our companies and teams together to achieve the full potential of our combined force.”
Forward highlighted several financial and strategic benefits that made the deal attractive. The deal will provide the company an additional 7,000 customers, an increased domestic footprint and a portfolio of logistics, multimodal and supply chain services. The Omni customer base is expected to benefit from better transit times, on-time performance and lower claim rates. The combined company will also benefit from an enhanced financial profile.
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“By uniting these two complementary businesses, the combined company will be well-positioned to meet the unique and evolving needs of a diverse and growing customer base while delivering enhanced value for our shareholders,” said Craig Carlock, lead independent director at Forward. “We are eager to welcome J.J. Schickel as president and a member of our board following transaction close and expect to benefit from his insights both as a Forward customer and operator.”
Omni shareholders will receive $150 million in cash under the terms of the agreement. They will also get Forward common stock and preferred stock. Ridgemont Equity Partners and EVE Partners currently have a majority ownership in the company. They will retain material ongoing ownership in the combined company and have agreed to certain lock-up and standstill provisions. Omni shareholders will own 37.7% of the combined company.
Morgan Stanley & Co. and Citi are serving as financial advisers to Forward. Cravath, Swaine & Moore is serving as legal counsel. Goldman Sachs & Co. and J.P. Morgan Securities are serving as financial advisers to Omni, and Alston & Bird is serving as legal counsel.
