Frozen Food Express Industries Inc (FFE) and Duff Brothers Capital Corporation have entered into a definitive agreement in which Duff Brothers will offer to acquire all the outstanding shares of common stock of FFE (except shares owned by its affiliates) for $2.10 in cash per share of common stock.
Duff Brothers is wholly owned by Thomas and James Duff, who also indirectly own KLLM Transport Services LLC. The transaction rates FFE at about $38.2 million in equity value and was unanimously approved by FFE’s board of directors.
“For over a year, we have been reviewing a variety of strategic alternatives for FFE, which included exiting less profitable businesses, such as dry van truckload services, entering into the bulk tank water transportation business, and re-engineering our LTL services with technology enhancements that further differentiate our service offerings in the marketplace,” said Russell Stubbs, president and chief executive officer of FFE. “As part of this process, we were pleased when the Duffs expressed an interest in FFE. We believe the value of this transaction achieves our objective of delivering immediate and compelling value for our shareholders. Through the Duff’s ownership of KLLM, they have demonstrated a strong track record in the trucking industry, which will be beneficial to our customers, vendors, employees, and drivers.”
Thomas Duff said, “We are excited about the opportunity to add another leader in the temperature-controlled trucking industry to our family group of businesses. With the synergies and increased capacity that we can gain from the ownership of both FFE and KLLM, we know that we will be able to enhance the quality service that both companies have been providing to their customers. With our resources, we will be able to bring to FFE the financial strength that is needed to preserve and expand its operations for its valued employees for years to come. Overall, we see great things ahead for both of the companies.”
Under terms of the merger agreement, FFE’s stockholders will receive $2.10 in cash for each outstanding share of FFE common stock they own. This represents a 23.5% premium over the closing price July 12, 2013, the last full trading day before the announcement.
The transaction is expected to close by late August or early September 2013.
Additional information can be found at www.ffeinc.com.