Shares of Forward Air were up 10% in late-day trading on Wednesday following a Reuters report that “a handful of private equity firms” have submitted bids to acquire the trucking and logistics company.
Potential buyers were reported to include Clearlake Capital, which holds a 13% stake in the company. Also, buyout firms, including Apollo Global Management (NASDAQ: APO) were reported to have submitted bids.
Activist investors have pushed Forward Air (NASDAQ: FWRD) to entertain a sale or other strategic alternatives following its heavily contested merger with Omni Logistics. That deal, which was announced in August 2023, was quickly panned by shareholders as well as some of Forward’s legacy customers.
Forward’s shareholders took issue with the way the transaction was structured as it circumvented their vote. They also had concerns that the deal placed a large debt burden on Forward (a 5.3 times net debt leverage ratio at the end of the 2025 first quarter) and gave Omni’s private equity backers voting control. The merger eventually closed in January 2024 after months of litigation, including efforts from Forward to get out of the deal.
Forward announced a strategic review earlier this year, but activists said that was too late and claimed the company was “slow-walking” the process after months of pressure.
Activists were successful in forcing three directors – who they blamed for “massive value destruction” as a result of the ill-conceived merger – to resign from the board last month. The departing board members included Chairman George Mayes, who was voted out by shareholders at the company’s annual election.
At the same election, shareholders approved the company’s reincorporation to Delaware, which may make it easier to sell given the state’s favorable corporate governance policies.
Forward’s stock traded at $110 per share before the deal was announced in 2023. Shares slumped more than 40% in the months following the announcement, later cratering further once the deal closed in early 2024. The stock gapped below $10 shortly after Liberation Day tariffs were announced in April, but has steadily stepped higher in recent weeks as takeout speculation has ramped.
Shares stood at $30.60 late in the session on Wednesday.
Analysts and investors have told FreightWaves that shares of Forward could be valued at $40, or higher, in a takeout scenario.
The back-of-the-envelope math assumes a low-double-digit multiple on the company’s roughly $300 million in annual earnings before interest, taxes, depreciation and amortization. Backing out roughly $1.6 billion of net debt from a more than $3 billion enterprise value leaves equity value somewhere between $1.5 billion and $2 billion. (The company has roughly 42 million shares on a fully diluted basis.)
