NORTH SALT LAKE — Motor Cargo Industries Inc. and Nebraska-based Union Pacific Corp. said Tuesday that Union Pacific's trucking subsidiary, Overnite Holding Inc., will expand its Western market reach with a plan to acquire Motor Cargo in an $80 million deal.
Motor Cargo is a regional less-than-truckload motor carrier providing service throughout 10 Western states. Overnite provides nationwide less-than-truckload regional, inter-regional and long-haul service with full-state coverage in 32 states east of the Rockies.
With approximately 6.5 million shares of Motor Cargo outstanding, the transaction value is estimated at approximately $80 million, based on current stock prices.
The merger agreement provides for a first-step exchange offer for all Motor Cargo shares, in which Motor Cargo shareholders may elect to tender their shares for either cash, at $12.10 per share, or shares of Union Pacific stock, at an exchange ratio of 0.26 shares of Union Pacific stock for each share of Motor Cargo.
Hal Tate, chief executive officer and majority shareholder of Motor Cargo, and a second shareholder have agreed to tender their aggregate 63 percent ownership. Tate has committed to take shares of Union Pacific stock.
Motor Cargo shareholders who do not tender their shares will receive $12.10 per share in cash in the second-step merger.
The exchange offer is subject to customary conditions, including the tender of two-thirds of Motor Cargo shares. The offer is expected to be completed by year-end.