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In a strategic corporate maneuver, Forward Air Corporation (NASDAQ:FWRD) has announced the signing of a Merger Agreement on April 30, 2025, which will see the company reincorporate in the state of Delaware. The transportation and logistics services provider, with a market capitalization of $511 million and currently facing significant debt challenges, will merge with and into its wholly owned subsidiary, FA-Delaware Corporation, with the latter surviving as the new Forward Air Corporation.
The merger is contingent upon certain conditions, including the approval of the Merger Agreement by Forward Air’s shareholders and the continuation of the director and officer insurance policy in effect immediately prior to the merger. Upon completion, all issued and outstanding shares of Forward Air’s common stock will automatically convert to shares of the Surviving Corporation’s common stock. According to InvestingPro data, the company’s financial health score is currently rated as WEAK, with the stock down 57% over the past six months.
This corporate reorganization is aimed at streamlining operations and is detailed in the Preliminary Proxy Statement filed with the U.S. Securities and Exchange Commission on May 1, 2025. With the company’s upcoming earnings report scheduled for May 7, investors seeking deeper insights can access comprehensive analysis through InvestingPro’s detailed research reports. Shareholders of Forward Air will become shareholders of the new entity, which will continue the business operations of the former company and its subsidiaries.
The full text of the Merger Agreement, which outlines the specifics of the arrangement, can be found as Exhibit 2.1 in the Current Report on Form 8-K, filed in accordance with the Securities Exchange Act of 1934. This strategic move by Forward Air Corporation is based on a press release statement.
In other recent news, Forward Air Corporation has disclosed preliminary financial results for the first quarter of 2025, estimating its EBITDA to be between $54 million and $59 million. The company also anticipates an increase in liquidity, projecting it to rise to $392 million. Despite this positive outlook, Forward Air’s fourth-quarter 2024 earnings report revealed a significant miss on earnings per share forecasts, with an actual EPS of -$1.23, compared to the expected -$0.12. Revenue for the quarter was reported at $632.85 million, slightly below the forecasted $667.72 million.
In terms of credit ratings, Fitch Ratings revised Forward Air’s outlook from stable to negative, citing increased risks in the freight market and potential challenges in the company’s expedited freight business. The agency affirmed the Long-Term Issuer Default Rating at ’B’, while projecting a 12% increase in EBITDA for 2025, driven by cost and pricing actions. Meanwhile, Benchmark analysts maintained a Hold rating on Forward Air, noting the company’s progress following its acquisition of Omni Logistics, despite challenges in its core Expedited Less-Than-Truckload segment.
Additionally, Forward Air announced a board refreshment, with two long-serving members stepping down and the nomination of Paul Svindland, CEO of STG Logistics, to join the board. This move aligns with the company’s strategy to enhance its board’s capabilities. These developments reflect Forward Air’s ongoing efforts to navigate a challenging freight environment while pursuing strategic initiatives and cost-saving measures.
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