GXO - Trucking stocks rev higher after mega merger between Knight-Swift and U.S. Xpress

2023-03-21 10:05:47 ET

The trucking sector is on watch on Tuesday after a mega-deal was announced with Knight-Swift Transportation ( NYSE: KNX ) acquiring U.S. Xpress ( USX ) for a hefty premium. The $808M deal will go down as one one of the largest truckload carrier sales in history at closing.

Knight-Swift’s ( KNX ) consolidated revenue run-rate is expected to approach $10B after the deal closes, while the truckload fleet will have approximately 25K tractors and 93K trailers. The USX transaction is expected to be accretive to Knight-Swift’s ( KNX ) adjusted earnings per share starting in 2024. The company is also targeting a high-80s adjusted operating ratio by calendar 2026, producing a mid-teens return on invested capital for the consolidated U.S. Xpress business unit. In addition, KNX management expects the U.S. Xpress truckload business to perform similarly to Knight-Swift’s other truckload business units over time based on Knight-Swift’s historical execution and success with acquisitions.

Shares of U.S. Xpress ( USX ) rose 294% to $5.91 vs. the deal price of $6.15 in opening trading. Knight-Swift ( KNW ) jumped 6.99% . Other notable trucking and logistics sector movers included Yellow Corporation ( YELL ) +6.28% , BETS ( BEST ) +5.88% , Radiant Logistics ( RLGT ) +3.65% , GXO Logistics ( GXO ) +3.44% , Saia ( SAIA ) +2.68% , Werner Enterprises ( WERN ) +2.55% , Old Dominion Freight Line ( ODFL ) +1.75% , J.B. Hunt Transport ( JBHT ) +1.71% , and Daseke ( DSKE ) +1.70% . Other interesting movers were Proterra ( PTRA ) +9.20% and TuSimple ( TSP ) 4.90% higher from the electric vehicle sector.

Read more about the trucking sector mega-merger.

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