Forward Air-Omni merger finally closes

Forward Air announced Thursday it has completed the acquisition of Omni Logistics. The transaction’s closing ends a bitter legal dispute between the two parties.

A news release said the deal, which likely closed at a total purchase price of $2.1 billion, is expected to create a “category leader in the expedited LTL market.” The initial price tag of $3.2 billion and the structure of the deal, which didn’t require a vote from stockholders ahead of closing, drew the ire of some of the company’s investors.

Shareholders were also concerned with the debt load Forward would inherit in the transaction and the potential shift in control to Omni’s stakeholders, which include private equity firms Ridgemont Equity Partners and EVE Partners. The collective group will end up holding a 35% stake in Forward (NASDAQ: FWRD) as well as four board seats, and Omni’s CEO will now be the president of the combined company.

The deal’s structure also requires Omni’s stakeholders to vote in favor of board-chosen directors in future elections, which some shareholders said will keep the current power structure in place regardless of performance. However, Forward said it would provide more details on its management structure and revamped board, as well as financial targets, when it reports fourth-quarter results next month.

Existing Forward shareholders will still have a say in the matter.

They will be asked to convert the nonvoting preferred shares allocated to Omni as part of the transaction to common, voting shares. However, failure to do so would result in the preferred shares receiving a hefty dividend.

Source: freightwaves.com