Knight Swift Inks Deal to Acquire Truckload Carrier U.S. Xpress; Deal Looks Fair-Value Accretive

Diversified trucking and logistics specialist Knight-Swift agreed to acquire public truckload peer U.S. Xpress for $324 million (equity value) in a mostly cash deal. With an enterprise value near $800 million, the deal carries an EV/EBITDA multiple of more than 13 times our own 2023 estimate for U.S. Xpress. That said, the multiple could be closer to 5 to 6 times our preliminary 2024 EBITDA estimate for U.S. Xpress, which incorporates a better trucking backdrop and initial synergies. Following the transaction, Knight's pro forma leverage could exceed 1.7 times EBITDA, though free cash generation should gradually bring that down. Management expects the deal to close by early third quarter.