ABF to Buy Panther Expediting for $180 million

Street Insider
June 14, 2012

Arkansas Best Corporation (Nasdaq: ABFS), announced it has entered into a definitive agreement to acquire Panther Expedited Services, Inc. ("Panther"), from Fenway Partners LLC, a leading middle market private equity firm. The total transaction value is approximately $180 million, subject to post-closing adjustments, with all of Panther's outstanding debt being repaid as part of the transaction. The acquisition is scheduled to close on or about June 15, 2012, subject to customary conditions, including the funding of a new term loan agreement for Arkansas Best.

Panther is North America's largest independent expedited transportation and premium logistics provider. Panther reported approximately $215 million in revenue (unaudited) and $24 million of adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") in 2011. ("Adjusted EBITDA", for this purpose, includes adjustments for management fees/expenses.) Panther's specialized equipment, technology and expertise in expedited transportation, premium logistics and global forwarding will enhance Arkansas Best's end-to-end solutions offering, providing more of the services that customers increasingly demand. The current Panther management team is expected to remain in place to manage and grow the business.

Arkansas Best expects to fund the $180 million purchase price with $80 million in cash and a five-year $100 million senior secured term loan, which can be increased to $175 million through an accordion feature. 

Following the close of the transaction, Panther will operate as a wholly owned subsidiary of Arkansas Best and a sister company to ABF. Andrew Clarke will remain with Panther as President and CEO, reporting directly to Ms. McReynolds. Additionally, all other members of the Panther executive team are expected to remain in their current roles with the company.

In 2011, Panther reported gross revenues of approximately $215 million (unaudited) and Adjusted EBITDA of $24 million. Panther's Adjusted EBITDA has averaged more than $20 million since 2006 despite the recent economic downturn. 

Stifel Nicolaus Weisel acted as financial advisor to Arkansas Best for the transaction while J.P. Morgan Securities LLC acted as financial advisor for Fenway Partners and Panther. U.S. Bank National Association is acting as the lead arranger of the loan syndicate for the transaction. Stephens Inc. provided a fairness opinion to Arkansas Best. Vinson & Elkins acted as legal advisor to Arkansas Best. Scudder Law Firm acted as legal advisor to Fenway Partners and Panther.

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