Forward Air said Monday its board has initiated a strategic review, which potentially includes selling the company or entering a merger agreement. The update comes after months of public criticism from investors, who have called on the company to engage in a sale process following its contested merger with freight forwarder Omni Logistics.
Investors have pointed to “misguided capital allocation” and poor oversight as the reasons for the Greeneville, Tennessee-based trucking company’s current financial troubles. FreightWaves reported in October that the company had retained investment bankers to explore a sale.
Forward’s (NASDAQ: FWRD) problems began shortly after it announced the acquisition of Omni in August 2023. The deal was structured through a series of transactions allowing it to circumvent a vote by shareholders, who likely would have shot down the plan given the large price tag and high debt burden the transaction carried. Investors have also railed against the equity interest ceded to Omni’s private equity stakeholders and raised concerns that the vertical integration would scare off Forward’s legacy wholesale customers.
Forward outlined a range of options on Monday but said it has no timeline on when, or if, anything will be done.
The company said it implemented an additional $20 million in cost saving initiatives during the fourth quarter by reducing head count, consolidating operations at terminals and limiting its use of third-party providers. The $20 million in annualized cost reductions is in addition to the $75 million in merger synergies previously announced, which will be realized by the end of the first quarter.
It also reaffirmed Monday its full-year adjusted earnings before interest, taxes, depreciation and amortization guidance of $300 million to $310 million. The recent cost reductions weren’t part of the prior full-year guide and were required for the company to achieve its forecast.
“During the fourth quarter, we implemented the initial phase of our broader transformation strategy to create a truly integrated and go-to solution provider, and I am very pleased with the pace and rigor we are seeing in the early days,” said CEO Shawn Stewart in a news release. “Our initial actions have primarily been focused on structural changes which streamline operations and better support our long-term growth initiatives.”
Stewart took over in late April and has since been tasked with integrating Omni’s freight forwarding platform with Forward’s expedited trucking operations. Stewart replaced Tom Schmitt, who was the architect of the ill-fated merger.
