We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » Knight looks ready to go hostile on acquisition of USA Truck
newsworthy

Knight looks ready to go hostile on acquisition of USA Truck

September 30, 2013
Mark B. Solomon
No Comments

Knight Transportation Inc.'s proposed $242 million acquisition of USA Truck Inc. looks like it could become hostile.

In the wake of USA Truck's rejection of Knight's formal proposal late last week, Phoenix-based Knight issued a statement today saying it is "prepared to take the necessary steps" to consummate a deal. Knight said several of USA Truck's largest shareholders support the buyout and have encouraged Knight to pursue it.

Knight's remarks aren't surprising, as it was long believed that, if a friendly offer failed, it would go directly to USA Truck's shareholders to pressure the board to do a deal.

The battle between the two truckload carriers escalated on Thursday after USA Truck issued a statement rebuffing Knight's offer and criticized Knight for presenting its proposal "in a misleading manner." Van Buren, Ark.-based USA Truck said its board reviewed Knight's unsolicited proposal in early September and determined it "substantially undervalued" USA Truck in light of changes made by top management as part of its ongoing multiyear turnaround plan.

USA Truck said in its statement that Knight on Sept. 13 rejected its offer to meet and discuss the proposal, informing USA Truck that it saw no need to discuss the matter at that time.

Under the proposal, Knight, which already owns 8 percent of USA Truck stock, would pay $9 in cash, or about $95 million, for the remaining shares. It would also assume $147 million in USA Truck debt.

Knight said an acquisition would shore up USA Truck's money-losing operation and provide shareholders with better value than if the company continued to operate on its own. Knight and USA Truck operate complementary service lines with similar lengths of haul and with fleets roughly the same age, Knight has said.

If the deal goes through, it would represent the largest truckload fleet acquisition in six years. USA Truck operates 2,100 rigs, while Knight operates about 4,100 tractors.

The U.S. truckload market, estimated at between $400 to $500 billion a year, is extremely fragmented. Swift Transportation Inc., the largest carrier by truckload revenue, controls only 2.4 percent of market share, according to data from the investment firm Robert W. Baird data on 14 large truckload carriers. (Knight is part of that list, USA Truck is not.) The second-largest, Schneider National Inc., controls about 1.8 percent of the market, according to Baird. Schneider pulls in significant additional revenue from other sources such as logistics and intermodal.

The back-and-forth between Knight and USA Truck is being watched as a possible signal of the start of a consolidation trend in the truckload market. With all carriers facing uneven volume growth and increasing pressures from higher labor, equipment, fuel, and regulatory costs, some of the weaker carriers may become takeover targets or go out of business. This, in turn, could shrink capacity and firm up pricing.

Transportation Trucking Truckload
KEYWORDS Knight Transportation Inc. Schneider National Swift Transportation USA Truck Inc.
  • Related Articles

    Knight Transportation proposes to buy USA Truck for $242 million in cash, debt assumption

    Knight suspends USA Truck buyout bid

    USA Truck offers to pay owner-operators based on percent of line-haul revenue

Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

Recent Articles by Mark Solomon

Coming together for road safety: interview with Joshua Girard

Off the rails

Freight rate spikes shaking up the C-suite

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Cold chain giant Lineage Logistics buys its own rail operator

  • Outlook 2021: What’s in store for logistics supply chain?

  • Cushman & Wakefield Brokers Sale of 170 Acres plus Lease for 1MSF Build-to-Suit for Home Improvement Retailer in Commerce City, CO.

  • Thriving in the long haul: interview with Colin Yankee

  • Capacity challenges will continue in 2021

Now Playing on DCV-TV

2mw 01 18 21 thumb

LTL Carriers Using Yield Management Techniques to Identify New Accessorial Charges

DCV-TV 4: Viewer Contributed
As we head into 2021, shippers are not too optimistic about negotiating rates with their carriers. The reason for this, as highlighted in the three CODE RED Webcasts we've hosted with our friends from CSCMP and NASSTRAC, is that in today's transportation marketplace, shippers are operating in uncharted waters. With...

FEATURED WHITE PAPERS

  • Proven Benefits: A Compendium of Slotting Optimization Success Snapshots

  • Bridging Information Gaps in Dock and Yard Operations

  • How Intelligent Sensor Solutions Turn Data Into Action

  • Order picking Solutions: Understanding Your Options

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing