An amended agreement will give Omni shareholders $20 million in cash and 35% of common equity, instead of the $150 million cash and 37.7% equity previously agreed
Forward Air plans to move ahead with its acquisition of freight forwarder Omni Logistics with a smaller price tag, ending a drawn-out saga over the combination.
Trucking company Forward Air on Monday said the two parties had amended their agreement so that Omni shareholders would now receive $20 million in cash, instead of the $150 million initially agreed upon.
Omni shareholders would also now get 35% of Forward’s pro forma common equity, compared with the previously-agreed 37.7% of shares.
The revised agreement ends litigation between the two companies over the deal.
The new deal gives Omni an equity value of about $743 million, based on the Jan. 19 closing price of $51.30 a share. Forward’s initial deal with Omni gave the company an equity value of $1.88 billion, according to an investor presentation.
Including Omni’s net debt, which was $1.36 billion as of June 30, the new merger deal values Omni at around $2.1 billion.
In October, Forward Air said it might look to drop its original proposed takeover of Omni after facing pushback from investors. Omni then sued the company in a bid to force the closing of the deal.
Under the initial deal, which was announced in August and gave Omni a value of about $3.2 billion including debt, most of the payment to Omni owners would be in the form of stock. That stock would be distributed over time, allowing Forward to complete the deal without shareholder approval.
Analyst sentiment on Forward soured after the company initially announced the deal, with several downgrades of the stock due to the premium paid in the deal and Omni’s debt load.
Forward faced a lawsuit by shareholders and pressure from activist investor Ancora.
Shares of Forward have fallen about 56% in the last six months and recently traded near a 52-week low. Early Monday afternoon, shares were up 2.6% at $52.65.
Under the revised merger agreement, Omni shareholders would receive about 14.1 million shares on an as-diluted, as-converted basis, Forward said.
The companies are looking to close the deal by the end of the week.
“We have always believed in the power of this acquisition and are pleased to have found a way forward,” said Forward Chief Executive Tom Schmitt.
Write to Ben Glickman at ben.glickman@wsj.com
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Appeared in the January 23, 2024, print edition as ‘Forward Air to Buy Omni at Cut Price’.
