Omni Logistics Files Lawsuit Against Forward Air to Enforce Merger Agreement

Complaint Seeks Ruling to Require Forward Air to Close Transaction Under Legally Binding Terms of Contractual Agreement

Omni Also Issues Open Letter to Forward Air Shareholders to Share Its Views on Strategic Wisdom of Combination

DALLAS, Oct. 31, 2023 /PRNewswire/ -- Omni Logistics ("Omni"), a technology-driven provider of global multimodal logistics solutions and specialized services, today announced that it has filed a complaint in the Delaware Court of Chancery against Forward Air Corporation (NASDAQ: FWRD) ("Forward Air") regarding the companies' previously announced transaction.

Omni's lawsuit seeks specific performance under the Agreement and Plan of Merger between Omni and Forward Air dated August 10, 2023 (the "Merger Agreement"), requiring Forward Air to comply with its obligations to complete the transaction. The complaint also seeks a judicial declaration confirming that Omni has complied with all required provisions of the Merger Agreement. Omni has requested a trial before the Court of Chancery to obtain a ruling enforcing the Merger Agreement prior to the Merger Agreement's outside expiration date of February 10, 2024.

In conjunction with the complaint, Omni issued an open letter to the shareholders of Forward Air.

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October 31, 2023

Dear Shareholders of Forward Air,

This afternoon, Omni Logistics filed a lawsuit in the Delaware Court of Chancery seeking to require Forward Air to comply with their obligations to complete our previously announced combination. We felt it was important to share with you why we so strongly believe this transaction will create significant value for Forward Air, Omni, and our collective stakeholders.

The industry has been evolving towards a more integrated service model for customers, accelerated by the supply chain disruptions and heightened customer focus on cost and efficiencies that have marked the past few years. Forward Air CEO Tom Schmitt articulated as much on Forward Air's earnings call this morning, and we agree. That evolution underlies the fundamental strategic logic at the core of our transaction: combining Forward Air and Omni enables our two companies to meet the evolving needs of customers by creating an all-in-one expedited LTL partner that removes a meaningful layer of cost and complexity, without sacrificing service and with the experience and expertise of our highly seasoned, proven commercial team.

Early indicators of the strategic logic of the combination have been powerful. Omni's LTL revenue pipeline has increased by around 480% since the announcement in anticipation of the unique Omni-Forward Air proposition. Forward Air's customers appear to be responding similarly: as they stated in their October 30 earnings press release, since the combination was announced on August 10, their "average daily volumes with domestic freight forwarders increased by more than 14%."

Just as our customers want to work directly with their LTL provider, Forward Air wants to work directly with shippers; as they've said publicly, that was a key driver for this transaction. Despite Forward Air's leadership position in the expedited space, they are the only publicly traded LTL provider without a direct relationship with the overwhelming majority of its end customers – and that is not a position for long-term strength.

Creating such direct connections reduces costs for Forward Air and Omni's existing customers and also attracts shippers who currently engage with traditional, less optimal LTL carriers in order to ensure direct interactions. This transaction will encourage a significant customer segment to upgrade their direct carrier relationships, taking advantage of our all-in-one model uniting Forward Air's leading LTL network with Omni's top-quality service and capabilities. By becoming the most attractive option for all shippers, irrespective of their relationships across the value chain, Forward Air will be a more valuable company for shareholders by making them more indispensable to customers.

To that end, Omni's business model is an excellent strategic fit for Forward Air to focus on high-value freight and leverage its expedited LTL core – just as they articulated when the transaction was announced, and as further reinforced by their earnings commentary. Omni provides high-touch, supply chain solutions for the complex shipping needs of approximately 7,000 blue-chip domestic customers. We focus primarily on expedited air and ground services to drive density in the domestic over-the-road supply chain, rather than services that are not time critical, such as ocean, drayage, or intermodal services. Combining with Omni will accelerate Forward Air's focus on high-value expedited LTL, enabling us to serve as the low unit-cost provider to our customers with direct relationships. This is a winning model that will enhance Forward Air's competitive strength in the logistics space and create an industry innovator with attractive margins and growth prospects.

It is particularly notable that Forward Air's earnings commentary on their call earlier today heavily emphasized their desire to ramp up direct relationships with domestic shippers. In line with the view of one analyst on that call, it is unclear to us why Forward Air would now seek to convince their shareholders that they should significantly invest in organically growing their direct LTL business without having solved, by their own admission, for volume/price mix. As Forward's CEO stated the day of the announcement, "This combination of these two amazing companies is getting us to the fastest possible speed of going after that $15 billion expedited LTL market, the best way in the fastest way." We believe shareholders should question what has changed – particularly as our respective customers ramp up their business with us and give positive feedback on the deal.

While we are not yet shareholders of Forward Air, we intend to be strategic and long-term ones upon the closing of this transaction. We believe Forward Air's third quarter earnings results and commentary make clear that customers continue to seek a simplified cost structure and more direct relationships with their shipping partner. This combination remains, and is now even more clearly, the best path to achieve their desired strategy for shareholder value creation.

Omni believes Forward Air's threat to terminate the transaction is unenforceable under our binding contractual agreement – and we are confident that no impediment exists to closing the transaction immediately. More importantly, we believe that doing so is essential to best position our combined company to drive accelerated long-term growth and maximize value for customers and shareholders in a rapidly evolving industry environment.

We look forward to completing our transformational partnership as soon as possible.

Yours,

J.J. Schickel
Chief Executive Officer, Omni Logistics

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Omni is advised by Alston & Bird, LLP; King & Spalding LLP; Wachtell, Lipton, Rosen & Katz; Potter Anderson & Corroon LLP; Goldman Sachs & Co. LLC; and J.P. Morgan Securities LLC.

About Omni Logistics

Omni Logistics is a global multimodal provider of air, ocean and ground services. Complex supply chain solutions are designed according to each customer's specific freight needs, challenges and objectives, leveraging the expertise and advanced training of over 3,500 employees in more than 100 locations. Omni Logistics focuses on removing supply chain inefficiencies and providing low cost-per-unit solutions to approximately 7,000 customers worldwide. In addition to operating a full portfolio of multi-modal solutions both domestically and internationally, Omni Logistics manages a robust portfolio of supplemental services for enterprises dependent on the efficient movement of high value freight. As a signatory of The Climate Pledge, Omni Logistics is committed to creating supply chain visibility and eliminating waste in order to provide more sustainable transportation solutions.

Forward-Looking Statements

This press release includes forward-looking statements that are based on information currently available to management, management's beliefs, as well as on a number of assumptions concerning future events. Forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, which could cause the actual results to differ materially from those currently expected. In providing forward-looking statements, the company does not intend, and is not undertaking any obligation or duty, to update these statements as a result of new information, future events or otherwise.

Media Contact

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KekstOmni@kekstcnc.com

SOURCE Omni Logistics, LLC