FedEx buys Watkins Motor Lines
FedEx Corp. said it has signed an agreement to acquire
less-than-truckload carrier Watkins Motor Lines and some affiliated companies for $780 million in cash.
Privately held Watkins Motor Lines will become part of FedEx Freight and be rebranded as FedEx National LTL.
FedEx Freight will be able to provide more national long-haul coverage compared to its super-regional business model under which cross-country shipments were often handed off at a hub to another part of the company. Watkins is set up for more non-stop trips of three days or more and will operate as a separate network. FedEx Freight specializes in next-day and second-day regional service.
The move, which was first reported by the Memphis Commercial Appeal on May 20, comes on the heels of UPS’s acquisition of LTL carrier Overnite in 2005 as the two integrated logistics companies expand their reach into the trucking sector. FedEx entered the trucking business in 1997 with the acquisition of Viking Freight in the Western states as part of its purchase of Caliber Systems. It bought American Freightways in 2000 to give it access to the eastern part of the country and combined the two entities under the FedEx Freight name.
FedEx Freight now is one of the top four LTL carriers along with YRC Worldwide, (formerly YellowRoadway Corp.), Con-Way and ABF Freight Systems.
Watkins, based in Lakeland, Fla., has annual revenue in excess of $1 billion. It has 139 terminals in 42 states, 10,000 employees and operates more than 3,400 tractors and 10,200 trailers.
As part of the transaction, FedEx will also acquire the assets of Watkins Canada Express, which will be rebranded FedEx Freight Canada.
Watkins ranks 21st on the American Trucking Associations’ list of top motor carriers, and is one of the largest privately owned LTL carriers in the country.
Watkins President Chip Watkins will continue to serve as president of the new FedEx unit.
FedEx said the transaction is expected to close in the first quarter of fiscal 2007, which under the FedEx calendar begins in June.