This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Update: EGL Eagle to Acquire Circle International in $543 Million Stock Deal

Updated from 10:10 a.m. EDT

EGL Eagle Global Logistics (EAGL) announced Monday that it was acquiring Circle International Group (CRCL), a rival freight-shipping company, in an all-stock deal valued at $543 million that would increase its international presence.

Each of Circle's approximately 17.65 million shares will be converted to one share of EGL, valuing Circle at $30.75 a share based on Friday's closing stock prices. That represented a 22% premium over Circle's closing price Friday.

Circle International closed up 2 5/16, or 9.2%, at 27 7/16. EGL Eagle finished down 17/32, or 8.23%, at 28 7/32.

The combined company is aiming for an annual growth in the mid-20% range for its earnings per share, EGL said.

San Francisco-based Circle operates more than 300 logistical centers for international air and ocean transportation in more than 100 countries, while EGL operates 92 terminals in nine countries, 79 of which are in North America.

"This merger would enhance EGL's already solid market position domestically and would present tremendous opportunities for international growth," James R. Crane, EGL's chief executive, said in a statement. Crane will continue as chief executive of the combination, and Peter Gibert, Circle's chief executive, will join EGL's board and will fill another role that is not fully defined at this point, according to Michael Slaughter, a spokesman for EGL.

Slaughter said Circle's operating strengths would enhance EGL's marketing focus.

He said EGL and Circle will not face significant overlaps in their facilities or employees, but "integration is definitely a challenge in any situation." The companies will focus on combining their information technology systems and will have to meet the needs of both of their sets of customers, Slaughter added.

Gregory Burns, an analyst for Lazard Freres who has an outperform rating on EGL, called the acquisition a "very good long-term move" that would create a "strong international franchise" for EGL. Investors may initially adopt a wait-and-see attitude to observe the integration, Burns said, but he thinks "the company will be extremely well-positioned" in the medium-to-long run.

Since the merger combines nonasset-based businesses (which are businesses that provide management expertise but not tangible assets for moving the freight), EGL will gain employees, expertise and revenue -- and the challenge of maintaining quality employees and integrating the companies' information technology, Burns said.

Following the merger, EGL will have the ability to clear U.S. Customs, tender freight on ocean liners and air carriers internationally, as well as continue to move domestic airfreight. "It's extending an industry trend toward one-stop shopping," Burns said.

Lazard Freres has done no underwriting for EGL.

EGL, based in Houston, said the combined company is expected to have a stock market capitalization of about $1.5 billion.

EGL also announced Monday that it would change its fiscal year-end from Sept. 30 to Dec. 31, to deal with the reporting requirements of the combination and comparisons with similar companies.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs