Yellow Rolls Up USF Corp.

It agrees to buy the transport company for cash and stock worth $1.37 billion.
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Yellow Roadway

(YELL)

continued to grow its trucking empire Monday, striking a definitive agreement to acquire

USF Corp.

(USFC)

for $1.37 billion.

USF shareholders will get a choice between $45 cash or 0.9024 share of Yellow Roadway stock, with the final ratios being adjusted so the cash portion of the transaction comes out to $639 million. Yellow will also assume about $99 million of USF debt.

When the deal closes this summer, Yellow will have 1,000 service locations, 70,000 employees and revenue of $9 billion. The combined enterprise will offer next day, regional, national and international trucking and transportation capabilities.

Yellow, which has seen its shares double since it acquired Roadway Corp. about a year ago, expects the USF acquisition to add to its per-share earnings within 12 months of closing. Approximately $40 million of net synergies are expected within the first 12 months along with yearly synergies of $80 million after the first 12 months.

Shares of USF were recently up $8.28, or 21%, to $47.10.