Forward Air is a transportation services company that offers various services across North America, Europe, and Asia. The company’s segments include Expedited Freight, Intermodal, and Omni Logistics. Forward Air focuses on expedited less-than-truckload markets and alternative time-definite delivery solutions.
Ancora is an advisory firm with a history of activist efforts in niche areas like banks, thrifts, and closed-end funds. The firm’s tactics have evolved over the years, from micro-cap companies to larger companies. Ancora has a track record of using engagement with portfolio companies to drive corporate governance improvements and value creation.
Ancora has been involved with Forward Air since 2020, initially settling for two board seats in 2021. The campaign focused on capital allocation, cost cutting, margin improvements, and shedding non-core assets. While the stock initially performed well, it began to decline in late 2023 after the acquisition of Omni Logistics.
Ancora has raised concerns about the acquisition of Omni Logistics, viewing it as a misstep by management and the board. The firm believes that the deal was structured to avoid shareholder approval and has led to a decline in the company’s stock price. Ancora is now advocating for the sale of the company as a way to unlock value.
Ancora believes that selling the company is the best path to value creation, given Forward Air’s current challenges. The firm highlights the need to address the company’s over-leveraged balance sheet and bloated expenses. Private equity firms like Clearlake Capital have shown interest in engaging with the board about strategic alternatives.
Ridgemont Equity, a major stockholder with board seats at Forward Air, could play a significant role in determining the company’s future. The company’s large debt load poses a challenge to potential acquirers, as interest payments are impacting cash flow. Persuading Ridgemont to support a sale may be key to moving forward.
The activist comments made by Ancora regarding Forward Air highlight the company’s challenges and the potential for value creation through a sale. While the path forward may involve obstacles such as the company’s debt load and major shareholders’ positions, there is a clear opportunity for change and improvement. Forward Air may need to consider strategic alternatives, such as selling off non-core assets and restructuring operations, to address the concerns raised by activists like Ancora.