August 9, 2004 9:00 AM, EDT

FedEx to Buy Parcel Direct for $120 Million

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edEx Corp. said Monday it agreed to acquire Parcel Direct for $120 million in cash.

Parcel Direct, a division of Quad/Graphics, is a parcel consolidator. The deal is not expected to have a material effect on fiscal 2005 financial results, FedEx said.

The company said in a statement Parcel Direct would be a subsidiary of FedEx Ground. It offers customers including e-tail and catalog industries "a cost-effective means of shipping low-weight, less time-sensitive goods to residential customers," FedEx said.

Parcel Direct, based in New Berlin, Wisc., has about 450 employees and generated about $130 million in net revenue in 2003, FedEx said.

Packages handled by Parcel Direct are taken to 12 company locations around the country where they are sorted and consolidated and then taken to the U.S. Postal Service for final delivery, the Associated Press reported.

FedEx is ranked No. 2 on the Transport Topics 100 list of the largest U.S. and Canadian trucking companies.