SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrantx Filed by a Party other than the Registrant¨
Check the appropriate box:
| ¨ | Preliminary Proxy Statement |
| ¨ | Confidential, For Use of the Commission Only (as Permitted by Rule 14a-6(e)(2)) |
| ¨ | Definitive Proxy Statement |
| ¨ | Definitive Additional Materials |
| x | Soliciting Material Pursuant to § 240.14a-12 |
USF Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| x | No fee required. |
| ¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| (1) | Title of each class of securities to which transaction applies: |
| (2) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
| (5) | Total fee paid: |
| ¨ | Fee paid previously with preliminary materials. |
| ¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | Amount Previously Paid: |
| (2) | Form, Schedule or Registration Statement No.: |
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| (4) | Date Filed: |
Filed by: USF Corporation
Pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: USF Corporation
Commission File No. 0-19791
On February 28, 2005, USF Corporation and Yellow Roadway Corporation participated in an investor presentation regarding their announcement of an Agreement and Plan of Merger between USF Corporation, Yellow Roadway Corporation and Yankee II LLC, a wholly owned subsidiary of Yellow Roadway. A copy of the presentation is set forth below.
Additional Information and Where to Find It
Yellow Roadway and USF will file a proxy statement/prospectus and other relevant documents concerning the proposed transaction with the Securities and Exchange Commission (SEC). Investors are urged to read the proxy statement/prospectus when it becomes available and any other relevant documents filed with the SEC because they will contain important information. You will be able to obtain the documents free of charge at the website maintained by the SEC at www.sec.gov. In addition, you may obtain documents filed with the SEC by Yellow Roadway free of charge by requesting them in writing from Yellow Roadway or by telephone at (913) 696-6100. You may obtain documents filed with the SEC by USF free of charge by requesting them in writing from USF or by telephone at (773) 824-1000.
Participants in Solicitation
Yellow Roadway and USF, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from the stockholders of Yellow Roadway and USF in connection with the acquisition. Information about the directors and executive officers of Yellow Roadway and their ownership of Yellow Roadway stock is set forth in the proxy statement for the Yellow Roadway 2004 Annual Meetings of Stockholders. Information about the directors and executive officers of USF and their ownership of USF stock is set forth in the proxy statement for the USF 2004 Annual Meeting of Stockholders. Investors may obtain additional information regarding the interests of such participants by reading the proxy statement/prospectus when it becomes available.
Cautionary Statement Regarding Forward-Looking Statements
The information presented in this communication may contain forward-looking contain statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “expect(s)”, “feel(s)”, “believe(s)”, “will”, “may”, “could”, “anticipate(s)” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Yellow Roadway and USF, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in public filings with the SEC by Yellow Roadway and USF; the parties’ ability to consummate the proposed merger with, to achieve expected synergies and operating efficiencies in the merger within the expected time-frames or at all and to successfully integrate USF’s operations into Yellow Roadway’s operations; such integration may be more difficult, time-consuming or costly than expected; revenues following the transaction may be lower than expected; operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, may be greater than expected following the transaction; the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule; the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction and the value of the transaction consideration; changes in federal or state regulation concerning or affecting the transportation industry; inflation, inclement weather, price and availability of fuel, competitor pricing activity, expense volatility, a downturn in general or regional economic activity, changes in equity and debt markets, the state of the economy; the parties’ obligations to contribute to union-sponsored multi-employer pension plans may be higher than expected; the impact of work rules, any obligations to multi-employer health, welfare and pension plans, wage requirements, potential efforts to unionize previously non-union operations of the company and employee satisfaction, labor shortages, disruptions, stoppages or any other deterioration in the parties’ relationships with employees may impair the parties’ businesses and any future acts or threats of terrorism or war. In particular, the expectations set forth in this communication regarding accretion and achievement of annual savings and synergies are only the parties’ expectations regarding these matters. Actual results could differ materially from these expectations depending on factors such as the combined company’s cost of capital, the ability of the combined company to identify and implement cost savings, synergies and efficiencies in the time frame needed to achieve these expectations, prior contractual commitments of the combined companies and their ability to terminate these commitments or amend, renegotiate or settle the same, the combined company’s actual capital needs, the absence of any material incident of property damage or other unforeseen merger or acquisition opportunities that could affect capital needs, the costs incurred in implementing synergies and the factors that generally affect the respective businesses of Yellow Roadway and USF as further outlined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in each of the companies’ respective Annual Reports on Form 10-K. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Neither Yellow Roadway nor USF undertakes any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in Yellow Roadway’s and USF’s various SEC reports, including, but not limited to, each party’s Annual Report on Form 10-K for the year ended December 31, 2003 and Quarterly Reports on Form 10-Q for the reporting periods of 2004.
Opportunity Knocks Twice
February 28, 2005
Strategic Rationale
A mutually beneficial combination that delivers value to shareholders of both companies
Scale Services Synergies
Strong balance sheet
Shareholder value opportunity
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Scale
2005 pro forma revenue of $9.7 billion
$6 billion in combined assets
Over 70,000 employees
25,000 trucks and 90,000 trailers
Over 1,000 locations worldwide
2005 Estimated Revenue
(in billions) $9.7
$7.2
$2.5
USFC Yellow Roadway Pro Forma
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Services
Comprehensive next day services nationwide
Holland, Reddaway, Dugan, Bestway, and New Penn
Extensive national networks
Roadway Express and Yellow Transportation Efficient, variable-speed line haul networks
Premium services
Expedited, time definite, trade show, cross border, etc.
4+ Days
20% Next Day 29%
3 Days 22%
2 Days 29%
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Services (continued)
Truckload
Glen Moore and the truckload brokerage services of Yellow Roadway
Non-asset-based capabilities
Meridian IQ and USF Logistics offer complementary services
Meridian IQ USF Logistics
International freight forwarding X
Customs brokerage X
Dedicated fleet X
Contract warehousing X
Flow thru distribution X
Transportation management X X
Freight brokerage X X
Ocean services X X
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Synergy Areas
Combination leverages the core strengths of both companies Sharing of best practices Labor – opportunity for cohesive labor strategy Technology
Develop it once, use it multiple times
Share industry leading technology
Purchasing leverage
Support functions
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Synergy Targets
Approximately $20 million of cost synergies required to be accretive in the first twelve months
We expect around $40 million of cost synergies in the first twelve months and an additional $80 million by the end of year two
Longer term synergy potential in excess of $150 million
We expect the transaction to be accretive and a return on capital in excess of our cost of capital in the first twelve months after closing
Estimated Synergies
(in millions) $80
$40
$20
Synergies to be accretive
Synergies in year one
Synergies in year two
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Strong Balance Sheet
Pro Forma Debt to EBITDA
(net of cash)
1.8x
<1.5x
<1.0x
12/31/04 12/31/05 12/31/06
Strength of current balance sheets support transaction financing Free cash flow generation allows for rapid debt reduction
Financial results above combine Yellow Roadway and USFC for all periods presented
Pro Forma Debt to Capital
(net of cash) 44%
<35%
<25%
12/31/04 12/31/05 12/31/06
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Track Record of Success
Our track record of strategic success
2002 – Secondary stock offering 2002 – Spin-off of SCST 2003 – Roadway transaction
We have created significant shareholder value over the last three years by focusing on our core business
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Leveraging Our Successful Strategy
Roadway Transaction USF Transaction
Maintain separate brands X X
No change to customer interface X X
Significant synergies available X X
Service overlap X
Limited customer overlap X X
Geographic overlap X X
Experienced and committed operating management X X
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An Expanded Portfolio of Brands
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Management Team
Bill Zollars Chairman, President and CEO Yellow Roadway Corporation
Jim Staley President Yellow Roadway Regional Companies
Glen Moore
James Welch President Yellow Transportation
Bob Stull President Roadway Express
Jim Ritchie President Meridian IQ / USF Logistics
Mike Smid President / Chief Integration Officer Yellow Roadway Enterprise Services
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Transaction Highlights
Transaction value of $1.37 billion*; enterprise value of $1.47 billion*
USF shareholders can elect from the following, subject to proration, for each share of USF stock they hold:
Cash of $45 per share, or
0.9024 shares (fixed exchange ratio) of Yellow Roadway stock
Total gross cash consideration of $639 million, with the balance paid in stock
A tax-free transaction to USF shareholders to the extent the shareholders receive stock
* Based on the Yellow Roadway trailing 90-day average closing stock price as of February 18, 2005
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Next Steps
Timeline (estimated)
File proxy statement/prospectus with the SEC by April 1 Obtain shareholder approval Obtain regulatory approval Transaction expected to close in the summer of 2005
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Forward-Looking Statements
This presentation (and oral statements made regarding the subjects of this presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “expect(s)”, “feel(s)”, “believe(s)”, “will”, “may”, “could”, “anticipate(s)” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Yellow Roadway and USF, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in public filings with the SEC by Yellow Roadway and USF; the parties’ ability to consummate the proposed merger with, to achieve expected synergies and operating efficiencies in the merger within the expected time-frames or at all and to successfully integrate USF’s operations into Yellow Roadway’s operations; such integration may be more difficult, time-consuming or costly than expected; revenues following the transaction may be lower than expected; operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, may be greater than expected following the transaction; the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule; the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction and the value of the transaction consideration; changes in federal or state regulation concerning or affecting the transportation industry; inflation, inclement weather, price and availability of fuel, competitor pricing activity, expense volatility, a downturn in general or regional economic activity, changes in equity and debt markets, the state of the economy; the parties’ obligations to contribute to union-sponsored multi-employer pension plans may be higher than expected; the impact of work rules, any obligations to multi-employer health, welfare and pension plans, wage requirements, potential efforts to unionize previously non-union operations of the company and employee satisfaction, labor shortages, disruptions, stoppages or any other deterioration in the parties’ relationships with employees may impair the parties’ businesses and any future acts or threats of terrorism or war. In particular, the expectations set forth in this news release regarding accretion and achievement of annual savings and synergies are only the parties’ expectations regarding these matters. Actual results could differ materially from these expectations depending on factors such as the combined company’s cost of capital, the ability of the combined company to identify and implement cost savings, synergies and efficiencies in the time frame needed to achieve these expectations, prior contractual commitments of the combined companies and their ability to terminate these commitments or amend, renegotiate or settle the same, the combined company’s actual capital needs, the absence of any material incident of property damage or other unforeseen merger or acquisition opportunities that could affect capital needs, the costs incurred in implementing synergies and the factors that generally affect the respective businesses of Yellow Roadway and USF as further outlined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in each of the companies’ respective Annual Reports on Form 10-K. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Neither Yellow Roadway nor USF undertakes any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in Yellow Roadway’s and USF’s various SEC reports, including, but not limited to, each party’s Annual Report on Form 10-K for the year ended December 31, 2003 and Quarterly Reports on Form 10-Q for the reporting periods of 2004.
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