Knight-Swift to buy Chattanooga-based U.S. Xpress for $808 million

Deal combines two of the nation's biggest long-haul carriers

Staff photo by Matt Hamilton / U.S. Xpress headquarters are seen Aug. 23.
Staff photo by Matt Hamilton / U.S. Xpress headquarters are seen Aug. 23.

One of America's largest motor carriers will soon take the wheel of Chattanooga's biggest trucking company under an $808 million deal announced Tuesday.

Knight-Swift Holdings Inc. has agreed to buy U.S. Xpress Enterprises by this summer in a move that will boost Knight-Swift revenues nearly 30% by combining two of the nation's biggest long-haul carriers. The Chattanooga-based U.S. Xpress will remain a separate brand under the Phoenix-based Knight-Swift.

U.S. Xpress has struggled during the past couple of years to maintain its profit margins in a tight labor market coming out of the pandemic, reporting a net loss of nearly $44 million last year after cutting more than 100 jobs at its 1,400-employee corporate headquarters in Chattanooga.

U.S. Xpress stockholders, who have seen the share price of the company drop more than 90% from the initial stock offering price of $16 in 2018, will be able to recoup some of their losses from the sale. Knight-Swift has agreed to pay $6.15 per share, a premium price of more than four times the $1.50-per-share price that U.S. Xpress was trading for ahead of the purchase announcement Tuesday.

Eric Fuller, the son of company co-founder Max Fuller and the CEO of U.S. Xpress, said Tuesday he was "very pleased to deliver to our stockholders the opportunity for near-term liquidity at a significant premium."

"Additionally, joining the Knight-Swift team is an exciting opportunity for our people, our customers and Chattanooga and other communities we call home," Fuller said in an announcement of the sale. "The increased scale, operating expertise and resources of the combined entity will allow U.S. Xpress to pursue new levels of service and efficiency."

Despite the premium paid for shares of U.S. Xpress, Knight-Swift CEO Dave Jackson said Tuesday he expects the purchase of U.S. Xpress will help boost Knight-Swift earnings by calendar 2026.

"The opportunity to add one of the largest and most well-known brands in our industry, with a significant opportunity to improve earnings, gain customers and reach more professional drivers, was very compelling to us," Jackson said. "Although it will take time, particularly given the current freight environment, we would not have pursued the transaction unless we were confident in achieving our return thresholds within a few years."

Based on 2022 results, U.S. Xpress is expected to add about $2.2 billion in operating revenue for Knight-Swift, including $1.8 billion in truckload revenue from 7,200 more tractors and 14,400 more trailers. After the transaction, Knight-Swift's consolidated revenue run-rate is expected to approach $10 billion, while the truckload fleet will have approximately 25,000 tractors and 93,000 trailers.

  photo  File photo / U.S. Xpress President and CEO Eric Fuller

Investors appeared to welcome the deal and bid up the price of Knight-Swift shares Tuesday by more than 6.8%, or $3.62 per share, to close at $56.70 in trading on the New York Stock Exchange.

Shares of U.S. Xpress jumped four-fold Tuesday to close at $5.98 per share, up $4.48 per share, as investors seemed confident the merger will go through.

John Rickel, the lead independent director and chairman of the U.S. Xpress special committee that reviewed the purchase offer, said the company directors "evaluated the transaction against the company's standalone prospects and current macroeconomic environment and unanimously determined that the compelling and certain cash consideration is in the best interest of all U.S. Xpress stakeholders and maximizes value for its stockholders.

"Knight-Swift is a proven operator with a strong track record in the industry, and we are confident this transaction is the best path forward for U.S. Xpress," he said in a statement released Tuesday.

The boards of directors of both companies have approved the purchase of U.S. Xpress by Knight-Swift. The sale is still conditioned upon regulatory and shareholder approval, however.

The sale of U.S. Xpress is one of the largest ever in the trucking industry and will leave Chattanooga's multibillion-dollar logistics industry with Covenant Logistics as the only publicly traded trucking company headquartered in Chattanooga, although the city is still home to more than a dozen privately-owned freight brokerage and other logistics-related businesses.

Under the agreement announced Tuesday, company CEO Eric Fuller and Max Fuller, the executive chairman of U.S. Xpress who started the company with the late Patrick Quinn in 1985, will roll over a portion of their shares of U.S. Xpress into a 10% interest in a new Knight-Swift subsidiary formed to hold the U.S. Xpress business post-closing. The rollover interests will be subject to optional and mandatory redemption provisions based on the future performance of the U.S. Xpress after the business is sold.

"As minority owners in the future U.S. Xpress, the Fullers will have a continuing economic interest and be fully aligned with Knight-Swift in ensuring that U.S. Xpress is best positioned for success, including by fostering ongoing relationships with key customers and vendors, and maintaining other important business relationships," Knight-Swift said in an announcement of the purchase agreement Tuesday.

The $808 million purchase value includes the assumption by Knight-Swift of $484 million of outstanding debt and finance leases from U.S. Xpress and $324 million, or $6.15 per share, paid to shareholders of U.S. Xpress.

Knight-Swift said it had approximately $1.3 billion of unrestricted cash and available liquidity to help fund the transaction.

Knight-Swift Transportation Holdings

Founded: Swift Transportation began in 1966, and Knight Transportation started in 1990.

Headquarters: Phoenix

CEO: David A. Jackson

2022 revenues: $7.4 billion and ranked No. 7 on the 2022 Transport Topics list of top carriers

2022 net income: $771.3 million.

History: Knight Transportation merged with Swift Transportation in 2017 and acquired AAA Cooper Transportation in 2021 for $1.35 billion. The proposed $808 million purchase of U.S. Xpress is expected to be completed by the third quarter of 2023, if approved by regulators and shareholders.

Staff: 28,100 employees

U.S. Xpress

Founded: 1985 by Max Fuller and Patrick Quinn

Headquarters: Chattanooga

CEO: Eric Fuller

Facilities: 14 terminals and 30 drop yards nationally

2022 revenues: $2.2 billion and ranked No. 23 on the 2022 Transport Topics list of top carriers

2022 net loss: $44 million

Staff: 7,900 drivers (including independent contractors), 300 maintenance technicians and 2,200 non-driver employees

Contact Dave Flessner at or 423-757-6340.

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