Effective July 30, 2024, Knight-Swift Transportation Holdings
Inc. (NYSE: KNX) ("Knight-Swift" or the “Company”) acquired the
operating assets and assumed certain liabilities of the non-union
regional less-than-truckload (“LTL”) division (“DHE”) of Dependable
Highway Express, Inc. (“Dependable”), based in Los Angeles,
California. The acquisition is expected to be immediately accretive
to Knight-Swift’s earnings per share.
Knight-Swift CEO, Adam Miller, commented, “We are excited to
take the next step toward building a nationwide LTL business, and
especially to grow our network to include the key Southwest markets
of California, Arizona, and Nevada. This transaction increases our
LTL terminal and door counts by approximately 10% and brings our
network’s coverage of the US population to approximately 70%. The
strategic value of acquiring a strong Southwest competitor like DHE
is meaningful given the impact to our coverage area significantly
expands the customers we can serve as well as the difficulty of
building or acquiring LTL facilities in many of these locations.
DHE will connect with our existing AAA Cooper and MME businesses to
provide seamless coast-to-coast service to our customers.
“I want to welcome the DHE employees to the Knight-Swift family
and look forward to working together to deliver creative solutions
and excellent service to even more customers. Coupling the proud
DHE brand with our resources, network, and scale should represent
expanded opportunities for employees and enhanced offerings for
customers. We are grateful for the efforts of many at Knight-Swift,
AAA Cooper, and DHE who have worked to bring this transaction to
fruition and who will continue to work together to ensure a smooth
transition for all employees and customers.”
Dependable CEO Ronald Massman added, “The entire Massman family
is immensely proud of the legacy built by the DHE LTL team and
thankful for their efforts over our many years in business. While
we never intended to sell the division, we have watched with
admiration as Knight-Swift set about building a leading national
LTL business. When the Company approached us about a transaction,
we immediately saw the strategic merit of the Dependable LTL
division joining the platform. Additionally, we felt the entire
Knight-Swift organization epitomized our core values of Integrity,
Service and Diversity in every way. We could not have asked for a
better steward of the business and look forward to watching the
combined LTL business grow from here.”
Financial terms were not disclosed. The Company estimates that
DHE generated approximately $122 million in total operating revenue
over the past twelve months with an operating margin of
approximately 10%. The DHE associates and assets will operate as a
separate brand under the AAA Cooper corporate group. Joe Finney
served as Chief Operating Officer of DHE prior to the transaction
and will continue leading DHE as its President after the
transaction. Scudder Law served as legal advisor to Knight-Swift.
Houlihan Lokey served as financial advisor to Dependable, and
Proskauer served as legal advisor to Dependable.
About Dependable Supply Chain
Services
Prior to the transaction, Dependable’s LTL division operated
within the broader integrated services offering of Dependable
Supply Chain Services, an affiliated group of asset-based
third-party logistics providers founded over 70 years ago by the
Massman family. The LTL division serves its customers through a
network of facilities located across California, Arizona and
Nevada, and has developed a strong reputation for integrity,
reliability and diversity. Dependable will continue to operate its
full truckload, warehousing and distribution, harbor drayage and
third-party logistics businesses under its existing Dependable
Supply Chain Services branding.
About Knight-Swift
Knight-Swift Transportation Holdings Inc. is one of North
America's largest and most diversified freight transportation
companies, providing multiple truckload transportation,
less-than-truckload, logistics, and business services to the
shipping and transportation sectors. Knight-Swift uses a nationwide
network of business units and terminals in the United States and
Mexico to serve customers throughout North America. In addition to
operating the country's largest tractor fleet, Knight-Swift also
contracts with third-party equipment providers to provide a broad
range of services to its customers while creating quality driving
jobs for driving associates and successful business opportunities
for independent contractors.
Forward-Looking
Statements
This communication contains “forward-looking statements,” within
the meaning of Section 27A of the Securities Act of 1933, Section
21E of the Securities Exchange Act of 1934 and the Private
Securities Litigation Reform Act of 1995 that provides a safe
harbor for forward-looking statements, including statements
relating to the completion of the transaction, all statements that
do not relate solely to historical or current facts, and
expectations, intentions or strategies regarding the future. These
forward-looking statements are generally denoted by the use of
words such as “anticipate,” “believe,” “expect,” “intend,” “aim,”
“target,” “plan,” “continue,” “estimate,” “project,” “may,” “will,”
“should,” “could,” “would,” “predict,” “potential,” “ongoing,”
“goal,” “can,” “seek,” “designed,” “likely,” “foresee,” “forecast,”
“project,” “hope,” “strategy,” “objective,” “mission,” “continue,”
“outlook,” “potential,” “feel,” and similar expressions. However,
the absence of these words or similar expressions does not mean
that a statement is not forward-looking. Statements in this
announcement that are forward-looking may include, but are not
limited to, statements regarding the benefits of the transaction
with DHE, including statements regarding expected impacts on
Knight-Swift’s LTL network and relationships with customers and
employees, expected synergies and revenue opportunities,
anticipated future operating performance and results of
Knight-Swift, including statements regarding anticipated earnings.
By their nature, all forward-looking statements are not guarantees
of future performance or results and are subject to risks and
uncertainties that are difficult to predict and/or quantify. Such
risks and uncertainties include, but are not limited to: the risk
that there may be unexpected costs, charges or expenses resulting
from the transaction; risks related to the ability of Knight-Swift
to successfully integrate the businesses and achieve the expected
synergies and operating efficiencies within the expected timeframes
or at all and the possibility that such integration may be more
difficult, time consuming or costly than expected; risks that the
transaction disrupts Knight-Swift’s current plans and operations;
risks related to disruption of each company’s management’s time and
attention from ongoing business operations due to the integration;
continued and sufficient availability of capital; the risk that the
transaction could have an adverse effect on the ability of
Knight-Swift to retain and hire key personnel, to retain customers
and to maintain relationships with its business partners, suppliers
and customers and on its respective operating results and
businesses generally; the risk associated with assumed liabilities
including related litigation, and of future litigation related to
the transaction, including the effects of any outcomes related
thereto; risks related to changes in accounting standards or tax
rates, laws or regulations; risks related to unpredictable and
severe or catastrophic events, including but not limited to acts of
terrorism, war or hostilities (including effects of the conflict in
Ukraine), cyber-attacks, or the impact of any pandemic, epidemic or
outbreak of an infectious disease in the United States or worldwide
on Knight-Swift’s business, financial condition and results of
operations, as well as the response thereto by the Company; and
other business effects, including the effects of industry, market,
economic (including the effect of inflation), political or
regulatory conditions. Also, Knight-Swift’s actual results may
differ materially from those contemplated by the forward-looking
statements for a number of additional reasons as described in
Knight-Swift’s SEC filings, including those set forth in the Risk
Factors section and under any “Forward-Looking Statements” or
similar heading in Knight-Swift’s most recently filed Annual Report
on Form 10-K for the year ended December 31, 2023, Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 2024, and
Current Reports on Form 8-K.
You are cautioned not to place undue reliance on Knight-Swift’s
forward-looking statements. Knight-Swift’s forward-looking
statements are and will be based upon management’s then-current
views and assumptions regarding Knight-Swift’s transaction with
DHE, future events and operating performance, and are applicable
only as of the dates of such statements. Knight-Swift does not
assume any duty to update or revise forward-looking statements,
whether as a result of new information, future events,
uncertainties or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240730800358/en/
Adam Miller, CEO, Andrew Hess, CFO, or Brad Stewart, Treasurer
and SVP (602) 606-6349
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