Banking & Finance

Swift Set for IPO, A Re-Public Offering (SWFT)

Swift Transportation Co. (NASDAQ: SWFT) is set come public this week, and that should read “come public again.”  The trucking giant is coming back as a public company on Wednesday after shares price on Tuesday night. The expected price talk for the Initial Public Offering is for 67.325 million shares in a price range of $13.00 to $15.00 per share.

The joint book-running underwriters were listed as Morgan Stanley & Co, Bank of America Merrill Lynch, Wells Fargo Securities, UBS Securities, Citigroup, and Deutsche Bank Securities. Joint lead managers are listed as BB&T Capital Markets, RBC Capital Markets, and Stifel Nicolaus Weisel.  Co-managers are listed as Baird, Morgan Keegan, Stephens Inc., and WR Securities.

Among target freight hauling markets for Swift are building materials, paper products, and retail merchandise, throughout the US, Canada, and Mexico.   The company’s description notes, “At September 30, 2010, we operated a tractor fleet of approximately 16,200 units comprised of 12,300  tractors driven by company drivers and 3,900 owner-operator tractors, a fleet of 48,600 trailers, and 4,500 intermodal containers from 35 major terminals positioned near major freight centers and traffic lanes in the United States and Mexico. Our asset-based transportation services include dry van, dedicated, temperature controlled, cross border, and port (drayage) operations.”

Founder and CEO Jerry Moyes had to raise his offer to take the company private in 2007, which went for about $2.4 billion via a $31.55 per share offer and the assumption of $332 million in outstanding debt.  To finance the acquisition, Moyes formed an entity and entered into a $2.1 billion senior secured credit facility and $835 million in second-lien senior secured notes.

Investors need to know that Swift is selling shares of Class A common stock, but there will be two classes of authorized common stock. The Class A common stock rights are the same as the Class B common stock rights, except for the issue that Class A shares get one vote per share and Class B shares get two votes per share.  Each Class B share is convertible into one share of Class A common stock at any time and automatically converts into one share of Class A common stock upon the occurrence of certain events.

The SEC filing also noted, “Concurrently with our initial public offering, Jerry Moyes and the Moyes Affiliates will be involved in a private placement by a newly formed, unaffiliated trust of $300 million of its mandatory common exchange securities (or $345 million if overallotment option is used.

The total common stock after the offering with combined A-shares and B-shares is said to be 127,441,713 shares (or 137,540,463 shares if the over-allotment option is exercised in full).  At a mid-point of $14.00 per share, that puts the market cap at $1.784 billion to $1.925 billion.  Of course that is before any new shares become authorized and outstanding.

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