Swift Transportation (SWFT) and Knight (KNX) announce all stock merger

Swift Transportation and Knight (KNX) announce all stock merger; Swift share will convert into 0.72 shares of Knight-Swift by means of a reverse stock split, implying $22.07 for Swift; both cos guides Q1 and Q2 EPS below consensus (SWFT) :

Knight Transportation (KNX) and Swift Transportation (SWFT) announced that their boards of directors have unanimously approved a merger of Knight and Swift in an all-stock transaction that will create the industry's largest full truckload company. The combined company will be named Knight-Swift Transportation and will trade under the ticker "KNX."

• This transaction combines under common ownership two long-standing industry leaders creating North America's premier truckload transportation company with $5 billion in annual revenue and a "Top 5" truckload presence in dry van, refrigerated, dedicated, cross-border Mexico and Canada, and a significant presence in brokerage and intermodal. The company will remain headquartered in Phoenix, Arizona operating with ~23,000 tractors, 77,000 trailers, and 28,000 employees.

Each Swift share will convert into 0.72 shares of Knight-Swift by means of a reverse stock split. Each share of Knight will be exchanged for one Knight-Swift share. Based on the $30.65 closing price of Knight shares on April 7, 2017, the last trading day prior to the announcement, the implied value per share of Swift is $22.07. Upon closing of the transaction, Swift stockholders will own ~54 percent and Knight stockholders will own ~46 percent of the combined company. Based on Knight's closing share price on April 7, 2017, the number of combined company shares expected to be outstanding after closing and the combined net debt of Swift and Knight as of December 31, 2016, the combined company would have an implied enterprise value of ~$6 billion. Knight is expected to be the accounting acquirer, and the transaction is expected to be accretive to adjusted earnings per share with expected pre-tax synergies of ~$15 million in the second half of 2017, $100 million in 2018, and $150 million in 2019.

=Swift Transportation (SWFT) reported earnings on Mon 24 Oct 2016 (a/h)

Swift Transportation beats by $0.02, misses on revs; reaffirms FY16 EPS guidance  :

• Reports Q3 (Sep) earnings of $0.34 per share, $0.02 better than the Capital IQ Consensus of $0.32; revenues fell 4.9% year/year to $1.01 bln vs the $1.03 bln Capital IQ Consensus.
• Co reaffirms guidance for FY16, sees EPS of $1.30-1.40 vs. $1.34 Capital IQ Consensus Estimate.
• Truckload Revenue xFSR for the third quarter of 2016 was $469.1 million, compared to $489.5 million in the third quarter of 2015.
• Intermodal Revenue xFSR for the third quarter of 2016 was $83.0 million, compared to $88.1 million in the third quarter of 2015.
• For the third quarter of 2016, the Operating Ratio in our Truckload segment was 90.8% compared to 89.7% for the third quarter of 2015, while the Adjusted Operating Ratio was 89.8% and 88.4%, respectively, for the same periods.
• Outlook: "Despite the challenging freight environment that persisted throughout the third quarter of 2016, we remain committed to the key initiatives and countermeasures we believe are helping offset some of the financial impact of these market conditions. We are confident that our continued discipline and resolve will further enable us to be well-positioned within the market as the capacity / demand equation tightens throughout 2017."

=Swift Transportation (SWFT) reported 4Q earnings on Mon 25 Jan 2016 (before open)

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** charts after earnings **

Swift Transportation beats by $0.06, misses on revs; guides FY16 EPS in-line :

• Reports Q4 (Dec) earnings of $0.53 per share, excluding non-recurring items,$0.06 better than the Capital IQ Consensus of $0.47; revenues fell 4.4% year/year to $1.09 bln vs the $1.12 bln Capital IQ Consensus. Record Adjusted EBITDA of $196.5 mln and Consolidated Revenue xFSR of $996.2 mln
• Co issues in-line guidance for FY16, sees EPS of $1.50-1.60, excluding non-recurring items, vs. $1.55 Capital IQ Consensus Estimate.