The Forward Air board of directors has initiated a review of strategic alternatives for the logistics company, including a potential sale, following calls last year from multiple activist investors to consider discussions with prospective buyers.
The board is also considering a possible merger “or other strategic or financial transaction,” but has not made any further decisions, according to a company statement Monday morning. No timetable has been set for the review’s conclusion.
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Four activist investors that represent roughly 25 percent of Forward Air’s outstanding shares have publicly called on the company to explore strategic alternatives in the wake of its widely panned $2.1 billion acquisition of Omni Logistics, which saddled the less-than-truckload (LTL) and intermodal services provider with nearly $1.4 billion in additional debt.
Investors and customers alike had railed against the deal when it was first announced in August 2023, with the former calling it too expensive and accusing Forward Air of skirting a traditional shareholder vote to carry it out. The latter were upset that Forward had essentially acquired a freight forwarding competitor.
Forward and Omni engaged in dueling lawsuits after the acquirer felt the heat of the reaction and sought to exit the deal, but the merger finally closed in January 2024 under amended conditions.
Both Tom Schmitt and J.J. Schickel, the pre-acquisition CEOs of Forward Air and Omni Logistics, were casualties of the merger. Multiple other execs in the C-suite departed in the time since, most recently president and chief operating officer Chris Ruble, who was terminated in December.
Shawn Stewart, who headed up Ceva Logistics’ North America division from April 2020 to March 2024, replaced Schmitt in the role in April. Stewart said in the statement that Forward Air has implemented the initial phase of the broader Omni integration strategy in its current quarter.
“Our initial actions have primarily been focused on structural changes which streamline operations and better support our long-term growth initiatives,” said Stewart. “Growing our business, operating more efficiently and rightsizing our cost structure will allow us to better serve our customers, take advantage of anticipated demand when the market normalizes and capture the potential of the combined legacy companies.”
In the fourth quarter, Forward Air has also reduced operating expenses by cutting some of its workforce, consolidating terminal operations and reducing the use of third-party vendors.
These efficiencies are expected to save approximately $20 million in savings on an annualized basis. These savings are in addition to previously announced $75 million in merger integration synergies, which are on track to be achieved by the end of the first quarter of 2025 in March.
George Mayes, Forward Air’s board chairman, said in a statement that the logistics provider is “making tangible progress executing the Omni integration and delivering on synergy targets ahead of schedule.”
Separate from the strategic review, Forward had been conducting an analysis of Omni Logistics, which was described by chief financial officer Jamie Pierson on a Nov. 4 earnings call as “a collection of 12 companies providing different services across the logistics spectrum” prior to its acquisition.
When asked on the call about the potential sale of any individual pieces of Omni, Pierson said it was too premature for any decisions to be made.
“Are we still undergoing analysis for those that are non-core to the future of this business? Absolutely,” said Pierson. “If and when we get to a point to where we’re going to decide to sell one of those groups or divisions or assets, we’ll certainly let you know. But right now, it’s too premature.”
In the two months since the earnings call, Forward has not given any updates on the future of the individual Omni services.
As for the wider current strategic review of Forward Air, the company indicated that there’s no guarantee that any transaction or other outcome will be approved by the board, or occur at all.
The company said it does not intend to disclose developments of the review, “until it determines that further disclosure is appropriate or necessary.
Goldman Sachs is serving Forward’s financial advisor throughout the review process. The investment bank advised Omni Logistics during the Forward Air merger.
Forward reiterated its full year 2024 consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) guidance to be in the range of $300 million to $310 million.
