Arkansas Best Corp., a transportation holding company whose largest subsidiary is ABF Freight System Inc., on May 9 reached an agreement in principle to sell its non-asset based intermodal marketing unit Clipper Express for approximately $20 million. The buyer is Bluenose Holdings Inc., a division of Wheels Group, of Mississauga, Ontario. The agreement is subject to the negotiation of definitive terms and to the arrangement of financing, according David Humphrey, Arkansas Best’s director of investor relations.
Arkansas Best expects to close the deal in the third quarter of 2006, and the final purchase price will be based on balance sheet adjustments as of the closing date, Humphrey explained in an e-mail response to an inquiry by The Trucker.
“We’ve been exploring options regarding Clipper for awhile,” Humphrey said. “Wheels Group is a Canadian company that is in a similar business, in Canada, as Clipper.”
Clipper currently represents less than ten percent of the total revenues of Arkansas Best Corporation. Following the sale, Clipper’s results of operations will be reported as discontinued operations in the parent company’s consolidated financial statements.
Humphrey’s explanation followed an announcement of the sale earlier in the day by Arkansas Best president and CEO Robert Johnson, speaking at the Bear Stearns Global Transportation Conference in New York.
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