Arkansas Best to Buy Panther Expedited Services in $180 Million Deal

by Lance Turner  on Thursday, Jun. 14, 2012 7:43 am  

Arkansas Best CEO Judy McReynolds says the Panther service will be a sister service to its ABF Freight System operation.

Arkansas Best Corp of Fort Smith said Thursday that it has agreed to acquire Panther Expedited Services Inc. from Fenway Partners LLC, a private equity firm, in a deal worth about $180 million.

The deal, which would repay all Panther's outstanding debt, is scheduled to close Friday, subject to customary conditions, including the funding of a new term loan agreement for Arkansas Best.

According to Arkansas Best, Panther of Seville, Ohio, is North America's largest independent expedited transportation and premium logistics provider. The company reported about $215 million in revenue and $24 million of adjusted EBITDA in 2011.

Arkansas Best said Panther's "specialized equipment, technology and expertise in expedited transportation, premium logistics and global forwarding will enhance Arkansas Best's end-to-end solutions offering, providing more of the services that customers increasingly demand."

The company also said Panther offers "enhanced end-to-end logistics solutions and expertise including time-sensitive, high-value freight service," as well as access to a broader, $700 billion transportation and logistics market.

The company said Panther's management team is expected to remain in place to "manage and grow the business."

The deal marks the first acquisition under Arkansas Best CEO Judy McReynolds, who became chief executive in 2010.

"Panther Expedited Services is an excellent strategic fit for our company and our customers as we seek to offer end-to-end logistics solutions for progressively more complex supply chains," McReynolds said in a news release. "We are very enthusiastic about this unique transaction, which met all of our criteria for growth among many options we analyzed for several years."

McReynolds said Panther will operate as a sister company to Arkansas Best's ABF Freight System operation, the company's core less-than-truckload business. She said the company is creating "a more flexible cost structure" to compete in the global marketplace.

Since becoming CEO, McReynolds has led an effort to make the publicly traded (Nasdaq: %%ABFS%%) freight transportation services company profitable again, and the firm has started to reverse the string of losses.

On Jan. 27, after 10 quarterly losses, the company reported a return to profitability for full-year 2011 with net income of $6.2 million. Arkansas Best reported a net loss of $127.9 million in 2009, which it narrowed to a loss of $32.7 million in 2010. Revenue reached $1.91 billion in 2011, up from $1.66 billion in 2010.

But in April, the company reported a first quarter net loss of $18.2 million or 71 cents per share amid taxes and other one-time costs. The loss was wider than the $12.8 million 51 cents per share loss it announced in the same quarter last year.

The Deal



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