Con-way Acquires Contract Freighters, Inc. to Accelerate Growth and Expand Service Offerings

$750 Million Acquisition Creates Unique Transportation and Logistics

Enterprise with More Diversified Revenue, Broader Capabilities

Jul 16, 2007, 01:00 ET from Con-way Inc.

    SAN MATEO, Calif. and JOPLIN, Mo., July 16 /PRNewswire-FirstCall/ --
 Con-way Inc. (NYSE:   CNW) today announced that it has entered into an
 agreement to acquire Contract Freighters, Inc. (CFI), a privately held
 North American truckload carrier based in Joplin, Mo., in a transaction
 valued at $750 million.
     (Logo: )
     Founded in 1951, CFI is a respected, industry-leading service provider
 that today operates over 2,600 tractors and more than 7,000 trailers, with
 more than 3,000 employees including approximately 2,500 drivers that serve
 customers throughout North America.
     The acquisition elevates Con-way into a unique position in the freight
 transportation industry, creating a leading less-than-truckload (LTL),
 truckload (TL) and supply chain management enterprise with a broad
 portfolio of high-value solutions, noted Douglas W. Stotlar, Con-way's
 president and CEO.
     "Acquiring CFI is a significant addition to Con-way's ability to serve
 the customer. It establishes a superior platform for growth, clearly
 differentiating Con-way as a premier provider of supply chain and freight
 transportation solutions," said Stotlar. "This acquisition is a cornerstone
 of our strategic plan to grow the company, build competitive advantage and
 increase shareholder value."
     The acquisition will join CFI with Con-way's existing Con-way Truckload
 division, creating a business unit with over $500 million in annual
 revenues for truckload freight. Together with the complementary
 capabilities of LTL carrier Con-way Freight, and global supply chain
 services provider Menlo Logistics, the Con-way organization will deliver an
 expanded transportation and logistics platform to North America-based
 shippers as well as global businesses, from "first-mile" sourcing in Asia
 or Europe, to "last-mile" delivery in North America.
     "We are excited to join the Con-way family of operating companies. CFI
 will benefit from Con-way's infrastructure, broad service capabilities and
 strong brand recognition," said Herb Schmidt, president and CEO of CFI.
 "Becoming part of the Con-way organization will allow us to penetrate new
 markets and provide new services to our customers. In addition, Con-way and
 CFI share service philosophies and common values such as safety, integrity,
 commitment, and excellence."
     The companies expect to realize a number of strategic benefits from the
 combination, including:
     Diversified revenue mix. The combined truckload operations will
 generate approximately $500 million in truckload revenue for the Con-way
 enterprise, enabling the company to reach a more diversified mix between
 LTL, TL and logistics revenues, helping to moderate the effects of cyclical
 swings in the business units.
     Improved truckload operations. Con-way's existing truckload operations
 will be integrated into CFI's headquarters in Joplin, Mo. Moving this under
 CFI's best-in-class operating and management practices will markedly
 improve profitability on Con-way Truckload's existing revenue generated
 through dedicated line-haul services for its sister LTL company Con-way
     Retained contract carrier margins. CFI is Con-way Freight's largest
 provider of contract services for long-haul transcontinental truckload
 transportation. The acquisition will enable Con-way to retain margins from
 this contract business. In addition, Con-way Freight is CFI's largest
 customer, and the company foresees opportunities to further optimize
 freight operations for both the LTL and truckload networks through this
     Enhanced Mexico presence. With operations in Mexico for nearly 20
 years, CFI is recognized as one of that country's leading transportation
 providers, and is among the largest participants in the market for
 cross-border truckload freight. Combining CFI's network, experience and
 expertise with Con-way Freight's Mexico network and Menlo's in-country and
 border-based logistics operations significantly improves the combined
 company's presence and capabilities in Mexico.
     Expanded presence in key industries. CFI's strong customer base in the
 retail and consumer products industries complements Con-way Freight's
 strength in the industrial and manufacturing sector, and also aligns well
 with Menlo Logistics' principal industry verticals.
     Larger network footprint. The acquisition creates one of the most
 extensive infrastructure networks for less-than-truckload transportation,
 truckload, and supply chain, distribution and logistics management, as well
 as the sixth largest truck transportation company in North America.
     Synergies with Menlo Logistics. Menlo manages approximately $600
 million in domestic truckload transportation services on behalf of its
 customers, some of which already is handled by CFI. The acquisition will
 present opportunities for CFI and Menlo to collaborate, where practical, on
 freight flows to further optimize operations for its customers, introduce
 new services, and drive efficiencies in the Con-way network, all while
 fulfilling Menlo's responsibility to deliver the best-cost transportation
 solution focused first on the requirements of its customers.
     Accelerated growth opportunities, expanded services portfolio. As a
 combined company, Con-way and CFI will deliver a more comprehensive service
 menu for the heavy-weight freight portion of the industry, and will be able
 to leverage assets and networks to grow the company with complementary new
 products and services, across a larger and more diverse customer base.
     Stotlar and Schmidt both cited the similar cultures and focus on
 service integrity, which are inherent to both organizations, as a key
 factor in joining the companies. CFI and Con-way are each known for
 exceptional operational execution, and have market reputations as
 top-performing carriers with respected, professional management and high
 service levels. Their cultures consistently emphasize employee-driven
 values and a focus on efficient, exemplary service for customers.
     Concluded Stotlar, "We're very excited about this acquisition and the
 positive effect that joining these two industry leaders will have on the
 transportation and logistics market. This is a unique and powerful fit of
 two successful companies that together have great prospects for growth, and
 for driving sustainable service advantage for our customers, opportunities
 for our employees and increasing value for our shareholders."
     The acquisition will be structured as a merger as a result of which
 Con- way will acquire CFI's parent holding company, Transportation
 Resources, Inc., CFI and all other subsidiaries of the parent holding
 company. The acquisition is subject to customary review by regulatory
 authorities and fulfillment of closing conditions. The boards of directors
 of both companies have approved the transaction, which is expected to
 conclude during the 2007 third quarter. Con-way intends to fund the
 acquisition with existing cash resources together with proceeds from debt
 financing. The company believes that the allocation of capital to this
 acquisition will be more accretive than alternative uses of funds.
     Lead financial advisor on the acquisition for Con-way Inc. was Morgan
 Keegan & Co., with additional advisory support and financing for the
 acquisition provided by Goldman, Sachs & Co.
     Con-way and CFI executives will discuss the acquisition in a conference
 call for the financial community today, Monday, July 16 at 11:00 a.m.
 Eastern Daylight Time (8:00 a.m. Pacific). The conference call can be
 accessed at 1-866-264-3634 from the U.S. and Canada, passcode 7519595, and
 also will be available to other interested parties through a live Webcast
 on the Con-way Web site, The live call will be
 available to international callers at (706) 643-3632. A replay of the call
 will be available starting at 1:00 pm EDT on July 16 by calling
 1-800-642-1687, passcode 7519595. International callers can access the
 replay at (706) 645- 9291.
     About Con-way Inc.
     Con-way Inc. (NYSE:   CNW) is a $4.2 billion freight transportation and
 logistics services company headquartered in San Mateo, Calif. Named FORTUNE
 magazine's "Most Admired Company" in transportation and logistics for 2007,
 Con-way delivers industry-leading services through three primary operating
 companies: Con-way Freight, Con-way Truckload Services and Menlo Logistics.
 These operating units provide high-performance, day-definite less-than-
 truckload and full truckload and intermodal freight transportation, as well
 as logistics, warehousing and supply chain management services, and trailer
 manufacturing. Con-way Inc. and its subsidiaries operate from more than 500
 locations across North America and in 20 countries. For more information
 about Con-way, visit us on the Web at
     About CFI
     CFI is the leading service carrier in the North America truckload
 market. Founded in 1951 with one tractor and two trailers, the company now
 operates 2,600 tractors and 7,000 trailers and serves shippers throughout
 the continent. CFI was one of the first carriers to establish operations in
 Mexico and for its excellence in export service, CFI received the
 President's "E" and "E-Star" Awards. The company is also ISO 9001-2000
 certified. CFI's Web site can be found at CFI's site
 is also available in Spanish, located at
     Certain statements in this press release constitute "forward-looking
 statements" and are subject to a number of risks and uncertainties and
 should not be relied upon as predictions of future events. All statements
 other than statements of historical fact are forward-looking statements,
 including any projections and objectives of management for future
 operations, any statements concerning proposed new products or services,
 any statements regarding Con-way's estimated future contributions to
 pension plans, any statements as to the adequacy of reserves, any
 statements regarding the outcome of any claims that may be brought against
 Con-way, any statements regarding future economic conditions or
 performance, any statements of estimates or belief, any statements
 regarding the proposed acquisition of CFI and proposed related financing,
 and any statements or assumptions underlying the foregoing. Specific
 factors that could cause actual results and other matters to differ
 materially from those discussed in such forward-looking statements include:
 changes in general business and economic conditions, the creditworthiness
 of Con-way's customers and their ability to pay for services rendered,
 increasing competition and pricing pressure, changes in fuel prices or fuel
 surcharges, the effects of the cessation of the air carrier operations of
 Emery Worldwide Airlines, the possibility that Con-way may, from time to
 time, be required to record impairment charges for long-lived assets, the
 proposed acquisition of CFI and proposed related financing (including
 without limitation the possibility that such acquisition may not be
 consummated due to failure of regulatory approval or other closing
 conditions to be satisfied, risks relating to the financing, integration
 risks and risks that acquisition synergies are not realized), the
 possibility of defaults under Con-way's $400 million credit agreement and
 other debt instruments (including without limitation defaults resulting
 from unusual charges), and the possibility that Con-way may be required to
 repay certain indebtedness in the event that the ratings assigned to its
 long-term senior debt by credit rating agencies are reduced, labor matters,
 enforcement of and changes in governmental regulations, environmental and
 tax matters, matters relating to the 1996 spin-off of Consolidated
 Freightways Corporation ("CFC"), including the possibility that CFC's
 multi-employer pension plans may assert claims against Con-way, matters
 relating to the sale of Menlo Worldwide Forwarding, Inc., including
 Con-way's obligation to indemnify the buyer for certain losses in
 connection with the sale, and matters relating to Con-way's defined benefit
 pension plans. The factors included herein and in Item 7 of Con-way's 2006
 Annual Report on Form 10-K as well as other filings with the Securities and
 Exchange Commission could cause actual results and other matters to differ
 materially from those in such forward-looking statements. As a result, no
 assurance can be given as to future financial condition, cash flows, or
 results of operations.

SOURCE Con-way Inc.