Dive Brief:
- Alta Fox Capital this week joined a pair of other investment firms in urging Forward Air’s board of directors to explore a sale of the company.
- The investment firm, which owns a 3% stake in the beleaguered LTL carrier, called the Omni Logistics acquisition a debacle and “failure of your leadership” in a letter to the board Monday. A sale would “help reverse damage from the poor decisions that plagued your tenure,” the firm said.
- Forward Air is focused on executing its strategic plan but values the perspectives of its shareholders, the company said in a statement. It noted new board membership and management team replacements seek continuous improvement, transparency and accountability.
Dive Insight:
Without specifically mentioning its tumultuous acquisition of Omni in its statement Monday, Forward Air acknowledged that the company “has recently undergone a significant transformation.”
A wave of executive departures followed the Omni merger, with the turnover including the company’s CEO, CFO and board compensation chair.
Forward Air’s acquisition of Omni Logistics was anything but smooth. The deal led to a nearly $1 billion net loss in Q2, but the company expected to realize savings through integration synergies and other moves including an undisclosed number of layoffs in June.
In a call with analysts in August, CFO Jamie Pierson said the company “commissioned a full portfolio review of all our operations with a particular focus on those we deem non-core to our strategy,” but did not elaborate further.
Still, the review failed to quell major investors from urging the board to either explore a sale or other options to improve profitability.
“While a sale may not be your first choice, prioritizing shareholders’ interests and protecting them from more permanent value destruction must be your top priority,” Ancora Holdings Group said in a letter to the board.
Clearlake Capital Group shared a similar position in a securities filing, urging the board to pursue “strategic alternatives to increase shareholder value.”
