Knight-Swift Transportation (KNX) - Get Knight-Swift Transportation Holdings Inc. Class A Report shares rose Tuesday after the country’s biggest truckload carrier bought AAA Cooper Transportation for an enterprise value of $1.35 billion.
AAA Cooper is a less-than-truckload carrier, giving Knight-Swift entry into that market.
“The deal "positions us as a meaningful player in the LTL space, where we intend to grow both organically and through future acquisitions,” Knight-Swift said in a statement.
Knight-Swift recently traded at $46.69, up 2.59%, and has climbed 12% in the last six months.
The deal consists of $1.3 billion in cash, $10 million in Knight-Swift shares, and $40 million in assumed debt.
Bank of America provided cash for the transaction with a $1.2 billion term loan to Knight-Swift. Other cash came from Knight-Swift's existing liquidity.
The transaction is expected to be accretive to Knight-Swift’s earnings in this quarter.
“On a longer-term basis, the parties have identified multiple areas of revenue and cost synergies that are expected to lead to growth and margin expansion,” the company said.
AAA Cooper is expected to generate about $780 million in revenue, $140 million in EBITDA, and $80 million in operating income for full-year 2021, Knight-Swift said.
AAA has 70 facilities across the Southeast and Midwest. It has a fleet of almost 3,000 tractors and 7,000 trailers and 4,800 employees.