Swift Plans to Raise $1.01 Billion in Largest IPO for Truckload Carriers
This story appears in the Dec. 6 print edition of Transport Topics.
Swift Holdings Corp., the new corporate name for carrier Swift Transportation, said it plans to raise as much as $1.01 billion this month in an initial public offering of shares that could be the largest ever for a truckload fleet.
Swift, Phoenix, stated in a Nov. 30 Securities and Exchange Commission filing that it would offer 67.3 million shares at $13 to $15 each, and would use the proceeds to repay debt. Bloomberg News reported the stock offering would take place on Dec. 14.
Donald Broughton, an analyst with Avondale Partners LLC, said the move by Swift “is a reflection of what’s happening in the capital markets,” which have become stronger this year as the economy improved.
During November, Bloomberg reported 23 public offerings, the busiest month for IPOs in three years.
Broughton, who said no truckload carrier has had a larger initial public offering, or IPO, noted that the increased share offering activity this year reverses the trend that many companies followed in 2006 and 2007, when companies such as Swift and U.S. Xpress Enterprises were taken private.
Founder Jerry Moyes converted Swift from a publicly held carrier to a privately held business in a $2.5 billion deal during 2007.
The largest known trucking stock offering was in 1999, when UPS Inc., which ranks No. 1 on the Transport Topics Top 100 For-Hire Carriers in the United States and Canada, raised $5.47 billion.
Bloomberg reported that the Swift IPO was the second largest this year, topped only by General Motors Co.’s $18.1 billion. Earlier this year, Roadrunner Transportation Systems, primarily a less-than-truckload carrier, became the first trucking company to test the public markets in five years, raising about $140 million.
The latest round of public offerings have either been a way for private equity companies to get out of a business or moves to reduce debt, such as Swift’s offering, Broughton said.
In the first nine months of this year, Swift reported interest and debt costs of nearly $250 million, which wiped out the profit before interest and taxes of $166.5 million in that period.
Though interest and debt costs hurt the results, the $166.5 million profit before taxes and interest nearly doubled the year-earlier period.
The latest filing said Moyes owns 73% of the company’s shares now and will control 47% once the new shares are offered. He is not selling any of his shares.
Swift first announced its intention to sell shares publicly in July of this year.
Moyes first opened Swift shares to public ownership in 1990, 24 years after founding, then took control of the carrier before it was taken private.
Once the shares are offered, Swift will be traded on the New York Stock Exchange with the SWFT symbol, the same one that it had earlier when it was a public company.
