Knight-Swift Transportation Holdings Inc. (NYSE : KNX) U.S. entered into an agreement and plan of merger to acquire Xpress Enterprises, Inc. (NYSE : USX) from a group of shareholders for approximately $350 million on March 20, 2023. In the transaction, U.S. Xpress stockholders will receive $6.15 per share in cash for each outstanding share of U.S. Xpress Class A and Class B common stock, except Max Fuller, Executive Chairman of U.S. Xpress, and Eric Fuller and related entities (collectively, the “Fullers”) will rollover a portion of their shares of U.S. Xpress into an approximately 10% interest in a new Knight-Swift subsidiary formed to hold the U.S. Xpress business post-closing. Knight-Swift expects to pay the Payment Amounts with cash on hand and with immediately available funds and borrowings under Knight-Swift's $1.1 billion revolving line of credit. Knight-Swift had approximately $1.3 billion unrestricted cash and available liquidity on December 31, 2022, a portion of which will fund the transaction. U.S. Xpress will continue to operate as an independent brand. The total enterprise value of $808 million for U.S. Xpress represents Knight-Swift assuming U.S. Xpress' $484 million of outstanding debt and finance leases and purchasing its outstanding equity for $324 million. As of December 31, 2022, U.S. Xpress had approximately $96 million in outstanding borrowings under its secured revolving credit facility and $388 million in other long-term debt and finance leases. Knight-Swift expects to repay and terminate the U.S. Xpress secured revolving credit facility at closing while seeking to retain in place U.S. Xpress' existing primarily fixed-rate equipment and real estate financing arrangements.

Through closing, U.S. Xpress will continue to be led by its current senior management. At closing, Chief Financial Officer along with Eric Peterson, CFO, will transition out of their executive officer roles while remaining available to ensure a smooth transition. Tim Harrington and Josh Smith, both executives at Swift and members of the teams that helped achieve significant margin improvement following the Knight-Swift merger, will join U.S. Xpress as President and Chief Financial Officer, respectively. Upon completion of the transaction, U.S. Xpress will de-list from the New York Stock Exchange. The Merger Agreement provides that U.S. Xpress will be required to pay Knight-Swift a termination fee of $6,300,000, which can be increased to $12,600,000 if the agreement is terminated under certain circumstances. As of June 14, 2023 unvested restricted stock units (RSUs) will be converted to Knight-Swift (KNX) RSUs and will have the same terms and conditions as your U.S. Xpress RSUs such as vesting, acceleration and forfeiture. The RSU conversion ratio will be calculated after the closing of the acquisition, which we expect to occur in late June or early July.

The transaction is not conditioned on financing and is subject to regulatory and other customary conditions, including approval of holders of a majority of the voting power of the outstanding shares of U.S. Xpress; the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The transaction has been unanimously approved by the Board of Directors of Knight-Swift and a Special Committee of the independent directors of the U.S. Xpress Board of Directors. The Fullers, which together hold approximately 29% of the outstanding shares of U.S. Xpress common stock representing approximately 58% of the U.S. Xpress voting power, have delivered to the members of the U.S. Xpress Special Committee an irrevocable proxy to vote their shares in favor of the transaction. The special meeting of U.S. Xpress' stockholders to approve the merger will be held on June 29, 2023. The transaction is expected to close late in the second quarter or early third quarter of 2023. As of April 20, 2023, the transaction closing is now expected in early third quarter 2023. The transaction is expected to be accretive to Knight-Swift's adjusted earnings per share starting in 2024.

Mark A. Scudder of Scudder Law Firm, P.C., L.L.O. of Lincoln, Nebraska served as Knight-Swift's transaction and legal advisor and Philip Richter of Fried, Frank, Harris, Shriver & Jacobson LLP served as its legal advisor in connection with the transaction. J.P. Morgan Securities LLC served as exclusive financial advisor to the Special Committee of independent directors of the U.S. Xpress board of directors, and Erik Belenky and Keith Townsend of King & Spalding LLP served as its legal advisor. Holland & Hart LLP served as legal advisor to the Fuller family. J.P. Morgan Securities LLC acted as fairness opinion provider to the board of U.S. Xpress. Jakob Rendtorff and Eva Du of Simpson Thacher & Bartlett LLP provided financial counsel to J.P. Morgan Securities LLC. U.S. Xpress has engaged D.F. King to assist in the solicitation of proxies for the Special Meeting and provide related advice and informational support, for a services fee of $25,000. For services rendered in connection with the Merger, U.S. Xpress has agreed to pay J.P. Morgan a transaction fee equal to 1.50% of the merger consideration, of which $3.0 million became payable by U.S. Xpress to J.P. Morgan in connection with J.P. Morgan's delivery of its opinion, and the balance of which becomes payable upon the closing of the Merger. The transaction fee payable to J.P. Morgan is estimated to be approximately $12.5 million.