Omni Logistics filed a lawsuit in court Tuesday requiring Forward Air to close on a proposed merger between the two companies. The deal was announced August 10 at an initial price of $3.2 billion. In light of this, Forward’s shareholders and customers have raised concerns with the transaction.
Shareholders have questioned numerous aspects of the transaction, including the strategic fit, the deal price, the debt leverage required to fund it. Forward previously defended against those complaints in court but recently said that it may terminate the transaction because Omni didn’t meet pre-closing obligations, including a failure to provide timely access to information.
Omni says the market is “evolving towards a more integrated service model for customers” and the merger would remove a “meaningful layer of cost and complexity” for end customers.
“This is a winning model that will enhance Forward Air's competitive strength in the logistics space and create an industry innovator with attractive margins and growth prospects,” CEO J.J. Schickel stated. He said the deal would give Forward Air access to 7,000 domestic customers and its own LTL pipeline has increased 480% since the deal's announcement.