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In announcing its proposed acquisition of Panther Expedited, Arkansas Best said it expected the acquisition to “significantly enhance Arkansas Best’s end-to-end solutions offering.” Panther, it said, “offers an asset-light platform for growth in the $700 billion transportation and logistics market.”
Panther’s specialized equipment, technology and expertise in expedited transportation, premium logistics and global forwarding will enhance Arkansas Best’s end-to-end solutions offering, said a company statement. The current Panther management team is expected to remain in place to manage and grow the business.
“Panther Expedited Services is an excellent strategic fit for our company and our customers as we seek to offer end-to-end logistics solutions for progressively more complex supply chains,” said Arkansas Best President and Chief Executive Officer Judy R. McReynolds. “We are very enthusiastic about this unique transaction, which met all of our criteria for growth among many options we analyzed for several years.”
The deal was described as $80 million cash on hand and $100 million in a new term loan.
A strategic advisory group to Arkansas Best was engaged in 2008 and assessed company strengths and opportunities. It identified non-asset logistics as a key space for business expansion, said Arkansas Best.
The non-asset area is complementary to Arkansas Best’s asset-based core less-than-truckload (LTL) business and is aligned with its organizational competencies.
Panther brings expedited transportation and freight forwarding services to the Arkansas Best portfolio along with specialized technology and equipment.
Recent financial results didn’t excite analysts watching Arkansas Best Inc., parent of ABF Freight System Inc. and other freight transportation operations. Expectations were that the shares could rise after approaching 52-week lows. According to the company’s first-quarter 2012 financial statement, it was sitting on over $130 million in cash despite reporting operating losses of $22 million.
The company then reported that through June 10, second quarter 2012 billed revenue decreased one percent. Total billed revenue per hundredweight (including fuel surcharge) increased approximately six percent during the same period. Tonnage per day decreased approximately seven percent.
In the second-quarter-to-date, ABF experienced a small operating profit, the company said. But, ABF’s recent, historical operating ratio trend between first quarter and second quarter is an improvement of between five and seven points, the company added.
So, with mixed news at best, the company announced it would acquire Panther Expedited Services Inc.
Panther, which operates Panther II Transporation, Panther Global Premium Logistics and Integris Global Logistics indicated in a recent release that the specialized carrier had more than 11,000 customers “spanning all vertical markets.”
Panther Expedited Services Inc. had filed a registration statement with the Securities and Exchange Commission for an initial public stock offering on the NASDAQ exchange in 2006 and it later withdrew the filing.
Panther, with 2011 revenues of $215 million, is part of Fenway Partners LLC, an equity firm with other transportation and logistics holdings.
Arkansas Best Corporation / ABF Freight System, Inc.
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