UPS Unveils Exciting Expansion in Services for Global Shippers;

Purchase of Fritz Companies Completed; 7 Other Brokerage & Forwarding Acquisitions Announced

ATLANTA, May 24, 2001- UPS (NYSE:UPS) today revealed a key element of its strategy for long-term growth, announcing the formation of a new business unit that combines a number of recent acquisitions into a premier global customs brokerage and freight forwarding business.
The new unit will include the Fritz Companies, Inc.; seven brokerage and forwarding operations acquired over the past 18 months, plus UPS's existing freight forwarding interests.
This division, with net revenues exceeding $750 million, combines Fritz's worldwide reach with additional, concentrated expertise and capabilities inside the United States to facilitate North American trade. It will be headed by David Abney, a 27-year UPS veteran and former president of SonicAir, which is now part of UPS Logistics Group. The new business unit is not expected to have a material impact on UPS's earnings this year.
UPS agreed in January to acquire the Fritz Companies (NASDAQ:FRTZ), a leading freight forwarding, customs brokerage and logistics concern headquartered in San Francisco. That transaction was closed today following a vote approving the transaction on Wednesday by Fritz shareowners.
The acquisition of Fritz Companies was structured as a tax-free merger in which Fritz became a separate and wholly owned subsidiary of UPS. Each share of Fritz common stock will be exchanged for 0.200 shares of UPS Class B common stock, for a total issuance of approximately 7.4 million shares of UPS Class B common stock. The transaction will be accounted for as a purchase and is valued at approximately $437 million based on Wednesday's closing price.
Fritz is a recognized global leader in freight forwarding and customs brokerage with operations in 120 countries. The seven additional customs brokerage and freight forwarding companies — acquired by UPS since October 1999 — are recognized as the premier brokers in handling goods being imported into the United States from Canada and Mexico.
“Long before the purchase of Fritz, UPS developed a strategic plan that called for a dramatic expansion of the company's ability to serve customers shipping not only packages, but also large items and heavy freight across international borders,” said Abney. “That plan also called for the company to offer full service customs clearance services to shippers of all goods, not just those shipping small packages.”
The acquisitions include:
H.A. & J.L. Wood, Inc. of Pembina, N.D.
Border Brokerage Co. of Blaine, Wash.
Fulfillment Systems International (FSI) of Buffalo, N.Y.
Trans-Border Customs Service (TCS) of Champlain, N.Y.
W.Y. Moberly Inc. of Sweetgrass, Mont.
Miles Group, Inc. of El Paso, Texas
William F. Joffroy, Inc. of Nogales, Ariz.
The acquisitions were all cash transactions and terms were not disclosed.
In addition to Fritz Companies and the seven acquisitions, the new subsidiary will include an existing freight forwarding operation that includes Unistar USA, Atlas Air of the United Kingdom and UPS Italia.
“Today, the freight forwarding and customs brokerage industries are highly fragmented, both geographically and in the way services are provided to customers,” said Abney. “Moving forward, UPS will be able to offer customers a single point of accountability, which is a powerful value proposition. Particularly with the increasing amount of trade between the U.S., Canada and Mexico, the integrated network UPS is creating is unmatched in its scope and range of services.
“For example, a customer will be able to manufacture products anywhere in the world and through UPS, move those goods by any mode of transport across any border. When combined with our technology solutions, the financial solutions offered by UPS Capital and supply chain management provided by UPS Logistics Group, UPS has created an unparalleled offering in the marketplace.”
UPS is the world's largest express carrier and largest package delivery company and a leading global provider of specialized transportation and logistics services, serving more than 200 countries and territories. In 2000, UPS generated revenues of $29.8 billion and delivered more than 3.5 billion packages and documents worldwide. Headquartered in Atlanta, the company resides on the Web at www.ups.com.
Fritz common stock will be delisted from the NASDAQ National Market, effective at the close of trading today, and Fritz has taken steps to deregister its common stock with the Securities and Exchange Commission.