ClearBridge Investments LLC sent a letter to the Chairman and Chief Executive Officer and the lead independent director of Forward Air Corporation FWRD urging the company's board to reconsider its recently announced intention to buy Omni Logistics.
ClearBridge Investments, a wholly-owned subsidiary of Franklin Resources, has been a sizable shareholder in Forward Air since 2018.
It said it was surprised and alarmed by the recent announcement to acquire Omni Logistics for the stated enterprise value of $3.2 billion.
ClearBridge said Omni acquisition elevates gross financial leverage to about four times trailing adjusted EBITDA, an uncomfortable level, particularly in a higher interest rate environment.
It also argued about the unclear industrial logic of combining a specialized LTL trucker with a freight forwarder.
The deal synergies do not justify the valuation, size, and complexity of this transaction, said ClearBridge in the letter.
Price Action: FWRD shares are trading higher by 3.89% at $67.09 on the last check Monday.
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