has agreed to acquire the less-than-truckload operations of Watkins Motor Lines in a bid to bolster its position in the heavy-freight arena.
The deal is worth $780 million. Watkins Motor Lines, a privately held company based in Lakeland, Fla., will be renamed FedEx National LTL and operate as a separate division within the FedEx Freight segment. FedEx doesn't expect the deal to have a material effect on its fiscal 2007 financial results.
The term "less-than-truckload" refers to a practice in which freight carriers consolidate a number of small shipments and haul them using a single vehicle.
As part of the transaction, FedEx has also agreed to acquire the assets of Watkins' business in Canada, Watkins Canada Express. Shares of Memphis-based FedEx were down 32 cents, or 0.3%, at $107.40 Friday.
"This acquisition will extend our leadership position in the heavy-freight sector and provide new growth opportunities for the business," said Frederick Smith, chairman, president and chief executive of FedEx. "Our customers have increasingly asked us to provide a broader range of transportation and supply-chain services, and as a result of this acquisition, we will be in a better position to meet their expectations."
Watkins was founded in 1932 and has annual revenue in excess of $1 billion.