FedEx reported to buy US Watkins
FedEx is preparing to buy Watkins Motor Lines, the largest privately held LTL carrier in the country, according to a published report.
The Memphis Commercial Appeal, citing unnamed sources, said the companies were planning to announce as soon as June 1 a purchase that could be worth some $1 billion and add 139 terminals and a network that stretches across the country to its FedEx Freight trucking business. FedEx officials did not immediately return calls for comment.
Watkins had an estimated $1.01 billion in revenue last year and was the No. 15 trucking company in the United States based on revenue, according to the consulting firm SJ Consulting.
The Watkins business would join a FedEx Freight LTL business that is on track to clear more than $3 billion in revenue in its 2006 fiscal year, making it one of the top three LTL carriers in the country.
The purchase would follow UPS’s acquisition this year of Overnite Transportation, the Richmond, Va.-based operator that UPS is making into the anchor of its new UPS Freight division aimed at the industrial less-than-truckload market.
CEP Research
FedEx tipped to buy US trucking group
24-05-06
FedEx is reportedly set to buy a leading US long-haul trucking company to expand its North American overland freight transportation network. The deal could be worth up to $1 billion, US media said.
According to a report in the Memphis-based newspaper The Commercial Appeal, FedEx could announce the acquisition of Watkins Motor Lines as early as June 1.
Both companies declined to comment on the report which Watkins described as “rumours and speculation”.
Privately-owned Watkins, based in Lakeland, Florida, has annual revenues of about $1 billion, more than 9,000 employees and contractors and operates approximately 2,800 company and contractor-owned tractors and 11,200 trailers. It provides less-than-truckload (LTL) road transport services across the USA and has subsidiaries operating in Canada and Mexico.
Experts said that such an acquisition would significantly strengthen FedEx Freight, the express group’s trucking business, by giving it extra revenues and volumes, extending its network and fleet, and opening up new growth opportunities in the North American long-haul trucking market.
