Quote:
Originally Posted by AC120
Actually, leverage is about using borrowed money, which would mean increased debt for Swift. In 2005, Moyes leveraged his buyout of Swift stockholders to the tune of $2.74 billion, PLUS an additional $332 million in Swift debt (that's three billion borrowed dollars). I have no idea what debt service on principal, interest, and fees is costing him every year, but it's a huge chunk of what comes in--hard to see him adding to that burden. If Moyes can get his hands on money that easily these days, I'd like to see him restore the pay and benefits he cut in April.
Re: cash cow. I don't see that. The increased costs of getting a part of Werner by borrowing money would eat up the cash and the cow. It's a lot harder to get money these days than it was when Moyes took Swift private.
In contrast, Werner Enterprises doesn't even have to think about debt service. By the way, CL Werner has four sons who are with him in the business and the family owns about 40% of the company. I doubt that one of Werner's sons would sell his shares to Moyes and not to his own family.
Again, it sounds like the Swifty who told the story to jburd was just recycling old gossip and blowing smoke.
I'm well aware of what an LBO is. I was speaking in the broader sense here as Moyes, unless he did a massive stock placement to raise the cash thereby taking his company public he has to borrow the money or he could use an investment bank to borrow on Werner to help buy it. If the service on the resulting debt is less then the cashflow = cashcow or at the least a source of revenue to pay down his own debt while gaining him a greater footprint in the otr market. That makes sense to me. He would add a debt free source of cash to pay his own debt down. Read "Barbarians At The Gate"
If the family owns 40% then that leaves 60% dosn't it. All moyes has to do is get 41% to overide the 40.