Patriot Transportation Holding, Inc. (NASDAQ: PATI) shares are experiencing a significant upswing at the commencement of today’s trading session. Patriot Transportation’s stock has surged by an impressive 105.08%, reaching $15.75 in early trades. This remarkable ascent in PATI stock value can be attributed to a well-thought-out strategic maneuver.
Patriot Transportation (PATI) has formally announced a momentous agreement wherein United Petroleum Transports, Inc. (“UPT”) will undertake the acquisition of all outstanding shares of Patriot’s common stock, offering a lucrative $16.26 per share in cash. This transaction effectively appraises Patriot Transportation at approximately $65.9 million, inclusive of assumed cash and debt.
This strategic amalgamation advances the joint vision of UPT and PATI to ascend to the top echelon of bulk tank carriers in terms of revenue, boasting combined earnings exceeding $200 million, while also aspiring to achieve preeminence as the foremost tank truck company in the southern United States.
Upon the consummation of this transaction, the unified company will boast a workforce of over 1,000 drivers serving markets extending from Arizona to Florida, encompassing 11 states and featuring an extensive network of more than 30 terminals. Both entities possess robust market identities and share a similar corporate culture that prioritizes safety and the delivery of high-quality customer service.
To harness the strength of its esteemed brand and reputation, UPT intends to continue the operation of Patriot Transportation’s business through PATI’s subsidiary, Florida Rock & Tank Lines, Inc. (“Florida Rock”). Leveraging the collective might of the merged company, its skilled workforce, and its substantial regional and national customer base, UPT aims to strategically expand its operations.
This transaction has secured unanimous approval from PATI’s Board of Directors. Furthermore, shareholders wielding 26.6% of the voting power pertaining to Patriot Transportation’s common stock have pledged their support for the merger. Anticipated for early 2024, the transaction will mark Patriot Transportation’s transition into a privately held entity, leading to its delisting from the NASDAQ Global Select Market.
Notably, the definitive merger agreement includes a 30-day “go-shop” period, set to expire on December 1, 2023. This provision allows Patriot Transportation, along with its representatives, to actively engage in soliciting and evaluating alternative acquisition propositions.
