FORT WAYNE, Ind. -- North American Van Lines will combine with Allied Van Lines to create one of the largest moving companies in the industry.
The $450 million deal was announced yesterday by North American's owner, the New York private equity group, Clayton, Dubilier and Rice Inc. Allied is owned by NFC PLC, a London logistics and moving services group.
Their deal will create a global competitor with locations in 36 countries, including 1,100 agents in North America, and worldwide revenue of more than $2 billion.
The combined company will be based in Fort Wayne and will maintain executive offices in Naperville, Ill.; London; and Melbourne, Australia.
North American has 3,200 employees worldwide, 1,500 at its Fort Wayne operations. It has been owned by the investment firm since March 1998. Allied Van Lines, through its operating companies, employs 4,000 worldwide.
The deal is expected to be completed during the fourth quarter, subject to regulatory approval.
"The merger is a terrific strategic fit between two companies with complementary strengths and exceptional brand names," said Joseph L. Rice III, chairman of CD&R;, in a prepared statement.
"The combined company will have significant operational breadth and management depth," he said. "We are pleased NFC shares our optimism about the prospects for this merger and will retain a significant equity stake in the new enterprise."
NFC, Allied's British owner, will receive $400 million in cash and $25 million in preferred and common stock representing about 20 percent of the stock of North American's parent company, NA Holding Co. NFC also will receive warrants to acquire an additional 10 percent of the common shares outstanding.
An investment fund managed by CD&R; and North American agents and management will own the balance of the combined company.
James W. Rogers, a principal of CD&R;, will become chairman of the combined company. R. Barry Uber, North American's president and chief executive officer, will continue as CEO. Michael Fergus, Allied's president and chief executive officer, will continue to lead that business in the United States and Canada.
Rogers said the strength gained through combining the companies will give them an opportunity to achieve market leadership by becoming a more effective global company in relocation services and logistics solutions.
"We bring together two outstanding teams with an agent network unmatched in the industry," Uber said. Fergus said the size, scope and management leadership in the combined company will enable it to offer the industry's most innovative service.
NFC will use cash it receives to reduce group borrowings.
Pub Date: 9/15/99