Forward Air is an asset-light transportation company that offers a range of services including less-than-truckload (LTL), truckload, and intermodal drayage services, as well as freight brokerage and supply chain services across North America, Europe, and Asia. The company’s core segments include Expedited Freight, Intermodal, and Omni Logistics. With a stock market value of $884.7 million, Forward Air has been a player in the transportation industry for years.
Ancora, an activist investment firm with $9.5 billion in assets under management, has had a long history with Forward Air. The firm initially filed a 13D in late 2020 and eventually settled for two board seats in early 2021. Ancora’s campaign at Forward Air focused on capital allocation, cost cutting, and margin improvements, leading to a significant increase in the stock price. However, a subsequent decline in late 2023 prompted Ancora to reevaluate its position at the company.
In August 2023, Forward Air announced the acquisition of Omni Logistics, one of its top five customers, at a high multiple. Ancora vehemently opposed the deal, citing concerns about excessive compensation for management and the lack of shareholder input. Despite their objections, the acquisition was completed in early 2024, leading to a sharp decline in Forward Air’s stock price.
Following the Omni Logistics acquisition, Ancora has returned to Forward Air as a top 10 shareholder with approximately 4% ownership. The firm’s current message is clear: hire advisors and sell the company. Ancora believes that the best path to value creation for Forward Air is through a sale to private equity or another strategic buyer. The firm points to the company’s over-levered balance sheet and bloated expenses as key areas needing improvement.
With private equity firm Clearlake Capital and other investors holding significant stakes in Forward Air, the company could be a potential acquisition target. Clearlake’s filing of a 13D indicating interest in engaging with the board about strategic alternatives signals a possible buyout offer. However, the company’s large debt load poses a challenge to any potential acquirer. Ancora may need to work closely with other major shareholders like Ridgemont Equity to push for a sale of the company through either persuasion or a proxy fight.
The future of Forward Air remains uncertain as activist investor Ancora pushes for a sale of the company. While the company has faced challenges in recent years, including the controversial acquisition of Omni Logistics, there is potential for a turnaround under new ownership. Whether Forward Air will be able to navigate its debt challenges and attract a buyer remains to be seen, but the involvement of influential investors like Ancora and Clearlake could shape the company’s fate in the coming months.