USA Truck Signs Letter of Intent to Acquire CCC Express
30 September 1999
USA Truck Signs Letter of Intent to Acquire CCC Express
VAN BUREN, Ark.--Sept. 30, 1999--USA Truck, Inc. (NASDAQ NMS: USAK), of Van Buren, Arkansas, announced today that it has entered into a letter of intent to acquire substantially all the assets of CARCO Carrier Corporation, which does business as CCC Express, Inc. CCC Express is owned by CARCO Capital Corporation, a privately-owned holding company, and is headquartered in the neighboring city of Fort Smith, Arkansas.The assets to be purchased include 512 tractors and 1,122 dry van trailers, which generated revenues from continuing operations in excess of $60 million in calendar year 1998 and in excess of $31 million for the six months ended June 30, 1999. Like USA Truck, CCC Express is a medium haul, common and contract carrier specializing in truckload quantities of general commodities. The acquisition would represent a 45% increase in the tractor fleet of USA Truck, which currently owns and operates 1,149 tractors and 2,238 dry van trailers. USA Truck would also assume CCC Express's rights under leases for shop and fuel facilities in Jonesboro, Arkansas, Oklahoma City, Oklahoma, Springhill, Louisiana, Fayetteville, North Carolina and New Paris, Indiana. USA Truck would also obtain the right to lease an additional CCC Express facility in Hope, Arkansas.
Robert M. Powell, President and CEO of USA Truck, said, "We are very pleased that we have been able to reach this preliminary understanding. CCC Express's fleet and driver team are a good fit with our own operations. The additional power equipment will allow us to expand our customer base, and the increased density of equipment in our market area will enhance the services we provide to our existing customers. The fact that CCC Express and USA Truck are located in the same community is an added benefit and should help ease the transition to a combined company."
Carl D. Corley, the principal shareholder of CARCO Capital and CEO of CCC Express, added, "In these days where consolidation is widespread in the truckload dry van business, I think this consolidation will make two companies even stronger by joining forces. I believe USA Truck has some of the finest internal operations in the industry, and this will make them a fierce competitor in the future."
The letter of intent contemplates that USA Truck will buy the specified assets of CCC Express for a purchase price consisting of a net cash payment estimated to be approximately $30 million, subject to adjustment prior to closing, and the assumption, subject to lender approval, of up to $7 million of term debt of CCC Express. USA Truck expects to pay the cash portion of the purchase price with available cash and proceeds of borrowings under its bank credit facilities.
The acquisition is subject to a number of contingencies, including the negotiation and execution of a definitive agreement between the parties, approval by USA Truck's Board, the negotiation of satisfactory terms for the debt assumption, the execution of a non-compete and consulting agreement between USA Truck and Mr. Corley and the completion by USA Truck of its due diligence review of the properties to be acquired. The definitive agreement will include additional contingencies customary for transactions of this type. The parties have indicated that they will work toward completing the due diligence period within approximately five weeks and executing a definitive agreement as soon as practicable thereafter.
This press release contains forward-looking statements. Among the key factors that are not within the Company's control and that may cause the proposed acquisition described in this press release not to be consummated include the inability of the parties to reach final agreement on various issues, the failure of any of the conditions to closing referred to in this press release or that may be set forth in an agreement between the parties and material adverse changes in the assets, business or financial condition of the parties. If the proposed acquisition is consummated, among the key factors that are not within the Company's control and that may prevent the Company from realizing the anticipated benefits of the acquisition include difficulties integrating the acquired assets or operations and unanticipated problems with the operating systems, revenue equipment or other assets of the acquired operations, as well as the inability of USA Truck to retain the customers of CCC Express or to maintain historical utilization rates with a significantly larger number of tractors than USA Truck has previously operated. See also the factors discussed in the Company's filings with the SEC under Securities Exchange Act of 1934, which may affect the Company's future results of operations and financial condition.
USA Truck is a medium haul, common and contract carrier specializing in truckload quantities of general commodities. The Company operates in the 48 contiguous United States and the Canadian provinces of Ontario and Quebec and in Mexico through the gateway city of Laredo, Texas.