Con-way Inc.'s announcement last month that it would acquire privately held Contract Freighters Inc. (CFI) for $750 million caught analysts, competitors, and even CFI's employees by surprise. But it didn't take long for them to see that the deal makes good business sense on several levels. Con-way's acquisition of CFI, a North American truckload carrier based in Joplin, Mo., will create the sixthlargest truck transportation company in North America.
In a conference call with financial analysts, Con-way President and CEO Douglas W. Stotlar and Herb Schmidt, CFI's president and CEO, repeatedly referred to the synergies they expect to achieve by aligning CFI with Con-way Freight, Con-way Truckload, and Menlo Logistics. Administrative and purchasing savings would be "very modest," Stotlar said; the big benefits will come in these areas: