DALLAS & SAN FRANCISCO--(BUSINESS WIRE)--May 10, 2006-- Air Container Transport Generated Approximately $45 Million in 2005 Revenue
Kitty Hawk, Inc. (AMEX: KHK) through its newly-created wholly-owned subsidiary Kitty Hawk Ground, Inc., announced today that it has entered into an Asset Purchase Agreement with privately held Air Container Transport, Inc. (ACT), to acquire substantially all of the operating assets of ACT for total consideration of $5 million. ACT operates an airport-to-airport LTL ground freight network primarily in California, Oregon, Washington, British Columbia, Colorado, Utah, Illinois and Texas. In 2005, ACT had revenue of $44.5 million.
For ACT's assets, Kitty Hawk Ground will pay total consideration of $5 million in a combination of cash and shares of unregistered Kitty Hawk common stock. Kitty Hawk Ground will not assume any liabilities of ACT, except for the liabilities expressly set forth in the Asset Purchase Agreement. Kitty Hawk has agreed to register the resale of the shares of Kitty Hawk common stock to be delivered to ACT within ninety days of the closing date.
The closing of the asset purchase is anticipated to occur during the second quarter of 2006 and is subject to various closing conditions. There is no assurance that the closing will occur or will not be delayed. The proposed transaction is expected to be accretive to Kitty Hawk's financial performance and has been approved by the Board of Directors of both companies and the stockholders of ACT.
ACT is considered by independent analysts to be the West Coast's dominant airport-to-airport less than truckload (LTL) deferred freight network carrier. Its operations are focused along the I-5 highway corridor and extend to all key business centers and international gateway airports from Southwest Canada to San Diego, California and extending as far east as Illinois and Texas. ACT operates in 26 cities offering air and ground freight delivery as well as local pick up and delivery services. The ACT fleet is comprised of approximately 150 owned, leased and owner-operated dedicated trucks.
Kitty Hawk will acquire and assume contracts relating to ACT's customer base, trucks and trailers, leased operating facilities, various other facility and equipment leases and its fleet of owner operators. ACT, with more than 20 years of experience, offers its customers full EDI capabilities, quality control, 24 hour/365 day dispatch, customer service assistance and express service. ACT's assets will be operated by Kitty Hawk Ground, Inc. doing business as Air Container Transport.
"This strategic acquisition strengthens Kitty Hawk's scheduled North American expedited air network as well as our nationwide scheduled LTL ground network," said Robert W. Zoller, President and CEO. "While the majority of ACT's customers and its geographic coverage represent new opportunities for Kitty Hawk, ACT's operations and service offerings are complementary to the existing Kitty Hawk scheduled operations and provide us with a solid infrastructure to expand all of our businesses with existing and new customers. Through this acquisition, we expect to begin to realize marketing and sales synergies during the remainder of 2006," Mr. Zoller added.
Philip Scherer, ACT's President, commented, "The West Coast and international gateway strengths developed by ACT over the past 20 years combined with the 30 year history of Kitty Hawk as a premier air and, most recently, ground LTL freight transportation company suggests a significant future value proposition for the domestic and international freight forwarders, logistics companies, airlines and integrators we serve. The ACT senior leadership and staff are excited about their opportunity to blend our strong West Coast, Asia and Pacific Basin business and customer focus with Kitty Hawk's reputation for superior service and extensive North American air and ground transportation system."
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ACT is considered by independent analysts to be the West Coast's dominant airport-to-airport less than truckload deferred freight network carrier.
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