Transportation and supply chain management solutions company Echo Global Logistics (ECHO:NASDAQ), announced on Friday that "it has entered into a definitive agreement to be acquired by funds managed by The Jordan Company, L.P. (TJC), a global private equity firm, for an equity value of approximately $1.3 billion."
Under the terms of the agreement, Echo stockholders will receive $48.25 per share in cash for each share owned, representing about a 54% premium over the company's closing share price on Thursday, September 9, 2021. The firm added it believes that TJC's offering price is fair as it equates to a 32% premium over its all-time high closing share price recorded exactly three years ago on September 10, 2018.
Echo advised that the agreement has already been unanimously approved by its Board of Directors, who recommended that Echo's stockholders approve the purchase as it provides shareholders with an attractive premium that delivers immediate compelling value in the form of an all-cash deal.
Upon completion of the transaction, Echo will become a private company which will allow it access to additional resources and will give the firm greater flexibility in building its technology and data science platform to enhance value and meet the needs of its shipping and carrier customers. The company is also expected to benefit from TJC's operational and industry expertise and capital support.
Echo Global Logistics indicated that that the acquisition is expected close in Q4/21, subject to approval from its shareholders, customary closing conditions and required regulatory approvals including the expiration of waiting periods as outlined in the Hart-Scott-Rodino Antitrust Improvements Act.
Echo Global Logistics' Chairman and CEO Doug Waggoner commented, "I'm thrilled to partner with TJC as they bring significant expertise and industry experience to enable Echo to further accelerate our success in the market…Having an experienced financial partner, with resources to fund continued growth, will result in a more rapid expansion of Echo's supply chain capabilities, including all of the automation planned to enable both our people and our digital freight marketplace."
Brian Higgins, head of logistics and supply chain vertical at TJC, remarked, "We are impressed with Echo's people, technology, and business results, since their founding in 2005 and are excited that Echo's leadership selected TJC as their partner in this recapitalization…We strongly support the team's vision for continued growth and look forward to partnering with them as we bring expanded financial resources and expertise to accelerate Echo's technology leadership that has set the company apart from its competitors."
Echo Global is headquartered in Chicago, Ill. and is a provider of technology-enabled transportation and supply chain management services. The firm has over 30 offices in the U.S. offering multi-modal freight brokerage and managed transport services. The company stated that "its proprietary, web-based technology platform compiles and analyzes data from its network of over 50,000 transportation providers to serve 35,000 clients across a wide range of industries."
The Jordan Company is a New York-based private equity firm that manages invested funds of over $17 billion. The firm's investment portfolio includes companies in the consumer, healthcare, industrials, technology, telecom, utility and transportation and logistics sectors.
Echo Global started Friday with a market cap of around $834 million with approximately 26.6 million shares outstanding and a short interest of about 3.1%. ECHO shares opened nearly 53% higher today at $47.90 (+$16.58, +52.94%) over yesterday's $31.32 closing price and reached a new 52-week high price this morning of $48.26. The stock traded between $47.77 and $48.26 per share and closed at $47.70 (+$16.38, +52.30%).
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