U.S. Xpress Buys 49% Stake in Arnold Transportation
.S. Xpress Enterprises Inc. said Friday it agreed to purchase a 49% stake of truckload carrier Arnold Transportation for about $6.4 million.
Arnold, based in Jacksonville, Fla., is ranked No. 91 on the Transport Topics 100 list of the largest U.S. and Canadian trucking companies.
U.S. Xpress said the deal would close by the end of November, and that Mike Walters would remain Arnold's chief executive officer. The release said Arnold expected revenue for 2004 to total about $195 million and had about 900 company tractors, 520 tractors provided by owner-operators and 4,050 trailers.
Under terms of the deal, Arnold's current management would retain 51% ownership of the company and control of the board of directors. U.S. Xpress would have a three-year option to purchase a larger stake in Arnold, but after three years, Arnold’s management group would have a similar option to buy out U.S. Xpress' interest.
"Our future results, Arnold's future results and both companies' capital structures will all be factors in determining if and when we would exercise our option to acquire equity control in the future," said Max Fuller, co-chairman of U.S. Xpress. "At such time, we would expect Mike and his management team to stay on and continue to execute their growth plan for the company."
U.S. Xpress said the transaction was expected to be funded through an equity investment, the rollover of management's current stock in Arnold and debt financing.
"We believe that U.S. Xpress will bring buying power, cross-marketing, and other benefits that will better position our people and operations for the longer term," Arnold’s Walters said.
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