ClearBridge Investments LLC sent a letter to the Chairman and Chief Executive Officer and the lead independent director of Forward Air Corporation (NASDAQ: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 2.20% at $66 in premarket on the last check Monday.
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