UPS to Acquire Menlo Worldwide Forwarding

Adds guaranteed heavy air freight capabilities worldwide

Adds guaranteed heavy air freight capabilities worldwide

Atlanta  October 5, 2004  UPS has agreed to acquire Menlo Worldwide Forwarding, a subsidiary of CNF, for $150 million in cash and the assumption of approximately $110 million in long-term debt, according to an announcement today from UPS and CNF.

Menlo Worldwide Forwarding is a global freight forwarder that provides heavy air freight forwarding services, ocean services and international trade management, including customs brokerage. It reported $2.9 billion in revenues in 2003.
In a statement, UPS said that the acquisition reinforces its strategy of providing broad supply chain solutions to enable global commerce. As a result of the acquisition, UPS will expand its global capabilities and add guaranteed heavy air freight services around the world, with an eye toward enabling customers to reach the global marketplace faster.

UPS also said that the acquisition means it will introduce new time-definite products such as overnight, two-day and deferred heavy air freight in North America.

"This acquisition is an ideal strategic and operational fit," said Bob Stoffel, senior vice president for UPS' Supply Chain Group. "Menlo Worldwide Forwarding is a well-established global air freight forwarder, with international trade capabilities, all of which complement UPS's existing operations.

Stoffel continued: "Customers want to streamline their supply chains. The expanded solutions UPS can provide will help customers simplify global trade by giving them more options for moving goods around the world and by providing a single point of accountability."

Menlo Worldwide Forwarding currently has about 12,000 employees operating in more than 175 countries and territories in the world. Its customers include major brands across a range of industries, including pharmaceuticals, apparel, high tech/electronics, government, consumer goods and retail.

In July, CNF reported that Menlo Worldwide Forwarding had an operating loss of $2.4 million during its second quarter, a reduction of $11.5 million when compared to last year's second quarter. CNF attributed this improvement to higher business levels worldwide and continued cost reductions.

UPS expects to complete the transaction during the fourth quarter of 2004. The transaction is subject to customary closing conditions.

W. Keith Kennedy, CNF chairman and interim chief executive officer, said: "The divestiture serves the best interests of our shareholders while enabling Menlo Worldwide Forwarding to join with one of the premier brands in the transportation industry."