Forward-Omni Merger Reaches Conclusion

Forward Air has sealed the deal on its acquisition of Omni Logistics, culminating in a transaction valued at approximately $2.1 billion, a drop from the initial $3.2 billion due to revised terms. The closure ends a contentious legal battle and shifts the expedited LTL market landscape.

Key Changes:

• Cash payment reduced from $150 million to $20 million.
• Equity stake cut from 37.7% to 35%.

This strategic move positions Forward Air to enhance its service offerings and customer base with Omni’s integrated logistics. However, it carries a substantial debt load and shifts a significant control stake to Omni's shareholders, including a 35% equity stake and four board seats.

The amended terms resulted from intense negotiations after Forward Air's attempt to withdraw from the deal, citing breaches by Omni, including misrepresentations and delayed financial disclosures. Despite these challenges, Omni insisted on compliance with all conditions, prompting a court intervention.

Despite a 57% drop in Forward Air's shares since the announcement and an 8.6% decline post-agreement, the company is ready for significant integration. Forward Air’s Chairman and CEO, Tom Schmitt, expressed confidence in the merger's potential for substantial revenue and operational efficiencies.

Looking Ahead:

• Forward Air promises a detailed management structure and financial targets in the forthcoming quarterly report.
• Existing Forward shareholders have the power to convert nonvoting preferred shares into common voting shares.

Source: FreightWaves