Ancora, a family wealth investment advisory firm, has been actively involved with Forward Air for nearly four years. The firm initially filed a 13D in late 2020 and settled for two board seats in early 2021 after a successful campaign focused on capital allocation and cost cutting, resulting in a significant increase in the stock price. However, after the company’s acquisition of Omni Logistics and subsequent stock price decline, Ancora has once again called for a strategic review and potential sale of Forward Air.
Forward Air, a transportation company specializing in expedited less-than-truckload markets, has faced challenges following the acquisition of Omni Logistics. The deal was viewed by Ancora as an entrenchment of management and board members to ensure excessive compensation, leading to a decline in stock price and opposition from the activist firm. The company now finds itself with an over-levered balance sheet and inflated expenses, necessitating a restructuring of operations and potential divestment of non-core assets.
Ancora, along with other activist investors like Clearlake Capital and Irenic Capital, have suggested that the best course of action for Forward Air may be to sell the company. The complexity of executing a successful turnaround as a public entity, including achieving deal-related synergies and reducing costs, presents a significant challenge for the current management team and board. The involvement of private equity firms, with expertise in restructuring operations and optimizing asset portfolios, could provide the necessary resources to unlock value for shareholders.
Ridgemont Equity, a major stockholder in Forward Air, holds significant influence over the company’s strategic direction. Ancora, along with other activist investors, may need to garner support from Ridgemont to push for a sale of the company, either through persuasion or a proxy fight. Clearlake Capital’s sizable stake and Irenic Capital’s call for a strategic review further underscore the potential for a change in ownership at Forward Air.
The future of Forward Air remains uncertain as activist investors push for a strategic review and potential sale of the company. The challenges faced by the transportation firm, including a burdensome debt load and operational inefficiencies, highlight the need for decisive action to unlock value for shareholders. As discussions around a potential acquisition by private equity firms continue, the role of major stockholders like Ridgemont Equity will be instrumental in determining the company’s fate. Ultimately, the decision to sell Forward Air may offer the best path forward for all stakeholders involved.