UPS TO ACQUIRE FRITZ COS. FOR $450 MILLION IN STOCK
UPS said today it will acquire the Fritz Cos., one of the nation’s largest customs brokerage and freight forwarding firms, for approximately $450 million in UPS Class B common stock.
UPS said it expects to complete the transaction during the second quarter of this year. The transaction marks the first UPS stock acquisition since UPS’s initial public offering in November 1999, which raised $5.5 billion.
The deal greatly expands UPS’s brokerage capabilities and rivals UPS’s competitor FedEx’s acquisition last March of Tower Group International, the former customs brokerage subsidiary of McGraw-Hill.
“This acquisition enhances UPS’s strategy by providing
comprehensive solutions across the supply chain at any point our customers desire, moving goods of any size, by any mode, anywhere in the world,” said Joe Pyne, UPS senior vice president for corporate development. “This expands our flexibility to offer a broader portfolio of services, including air, ground and ocean freight to our global customer base.”
The acquisition is subject to customary closing conditions, including approval by Fritz shareholders and regulatory clearance.
Fritz chairman and chief operating officers Lynn C. Fritz, who holds approximately 36 percent of the outstanding shares of the company, has entered into an agreement to vote the shares he controls in favor of the merger.
The acquisition is structured as a tax-free, stock-for-stock
merger in which Fritz shareholders will receive UPS Class B common stock in exchange for their Fritz common stock.
Founded in 1933, Fritz owns and operates 400 facilities in more than 120 countries, and has over 1000 employees globally.
In addition to its forwarding, customs brokerage and logistics services, the company offers a range of intermodal transfer services, duty drawback options, consulting on tax, trade and tariff matters, market research and training services.
Fritz reported gross revenues of $1.6 billion and net revenues of $619.3 million during its latest fiscal year which ended May 31.
Net income for the period totaled $17.4 million, with about 28 percent generated from air forwarding, 21 percent from ocean forwarding, 30 percent from customs brokerage operations and 21 percent from logistics services.