OVERLAND PARK, Kan. (July 8, 2003) — Yellow Corp. plans to buy Roadway Corp. for $966 million to make one of the world's largest transportation service providers with combined revenues of nearly $6 billion, the companies said.
In the deal, which will create the combined firm Yellow-Roadway Corp., Yellow also will assume an expected $140 million in net Roadway indebtedness. That figure brings the enterprise value of the acquisition to about $1.1 billion, the companies said in a statement. Yellow said it expects the transaction to add to earnings within 12 months after the deal closes. The companies expect to save $45 million by the end of the second year after closing from annual synergies. By five years after closing, they expect annual synergies of $125 million.
Bill Zollars, chairman, president and CEO of Yellow, will hold the same positions in the combined company. James D. Staley, Roadway's president and CEO, will continue to lead company as an operating entity under the Yellow-Roadway holding company. Three members of the Roadway board of directors—Frank P. Doyle, John F. Fiedler and Philip J. Meek—will join the board of the combined company.
With the acquisition, the combined company expects to implement the following goals:
* Strengthen its position in the highly competitive domestic and global transportation marketplace.
* Invest in and grow both brands.
* Implement best practices over a broader customer base.
* Leverage service capabilities and technologies.
* Introduce non-asset-based transportation management services to Roadway customers.
“This strategic combination brings the strengths of Yellow and Roadway together to capture significant synergies and growth opportunities,” Mr. Zollars said. “It accelerates our ongoing strategy, implemented over the past six years, to transform Yellow into a global transportation services and solutions leader. While there will be no change in the customer interface, customers can benefit from new and expanded service capabilities and greater technological advances.”