ArcBest Corp. of Fort Smith (Nasdaq: ARCB) said Tuesday that it has sold its FleetNet America subsidiary to Cox Automotive Mobility Solutions Inc., a division of Cox Enterprises Inc. of Atlanta, in a $100 million cash deal.
The publicly traded logistics company said the deal closed Tuesday.
FleetNet is a fleet maintenance and repair services provider. On Feb. 3, ArcBest reported annual revenue of $5.3 billion, of which $343.1 million was generated by FleetNet.
“FleetNet has been a valuable part of ArcBest, giving us insight and expertise in equipment maintenance and repair,” ArcBest Chairman, President and CEO Judy R. McReynolds said in a news release. “As an integrated logistics company, it is no longer core to our growth strategy. We’ve enjoyed working with the wonderful team at FleetNet and have benefitted greatly from their innovative mindset.”
Terms of the deal include a $100 million cash payment at closing subject to certain tax and other customary adjustments, customary representations and warranties of the seller, FleetNet and Cox Enterprises. ArcBest said that on a preliminary basis, it expects to receive proceeds, net of tax and transaction expenses, of about $75 million and to record an estimated after-tax gain of about $50 million on the transaction.
The company also announced it had increased its stock buyback program to $125 million.
“The sale of FleetNet and our strong balance sheet puts us in a great position to accelerate our return of capital to ArcBest’s shareholders,” McReynolds said.
ArcBest acquired FleetNet in 1995 with the $76 million purchase of its parent company, WorldWay Corp.