UPS Buys Fritz Companies Inc.
ATLANTA (AP) _ United Parcel Service is buying California logistics firm Fritz Companies Inc. for $450 million in stock, adding to the shipping giant’s growing logistics business and moving it into large-scale shipments.
The deal, announced Wednesday, calls for UPS to issue 7.4 million shares of its Class B common stock. Fritz shareholders will receive 0.2 share of UPS stock for each Fritz share in the deal.
At midday, UPS shares were down $2.50 to $58.50 Wednesday on the New York Stock Exchange, while Fritz surged $4.28 to $11.31 on the Nasdaq Stock Market.
UPS has bought five logistics companies in the last year, but the Fritz acquisition is the first stock purchase since the Atlanta-based shipper’s November 1999 initial public offering.
The acquisition will allow UPS _ traditionally a shipper of items less than 150 pounds _ to begin handling large freight for businesses, UPS spokesman Norman Black said.
``The one thing that Fritz does that we have never done is to handle the movement of heavy freight for our customers,″ Black said. ``We’re going to step into the supply chain to handle any freight or package movement no matter how big or small.″
San Francisco-based Fritz, which owns and operates 400 facilities in more than 120 countries, had net income of $17.4 million on revenue of $619 million in its last fiscal year.
Fritz Chairman Lynn C. Fritz controls 36 percent of the company’s shares and has agreed to vote his shares in favor of the merger, the companies said in a joint statement.
``We have grown into an industry force over the past 67 years but we can do even more with UPS’s systems, network and vision of enabling global commerce,″ Fritz said.
Fritz provides logistics help _ including supply chain solutions and transportation _ to industries such as retailing, pharmaceuticals and telecommunications. The company also offers customs brokerage assistance.
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