Good morning. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to tonight's Swift Merger conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Attendees for today's call include Kevin Knight, Knight Executive Chairman, Richard Dozer, Swift Chairman of the Board, Dave Jackson, Knight President and CEO, Richard Stocking, Swift President and CEO, Adam Miller, Knight CFO, Ginnie Henkels, Swift EVP and CFO, Jerry Moyes, Swift Founder and largest shareholder. Mr. Knight, the meeting is now yours.
Thank you. This is Kevin Knight, and I am pleased to welcome you to our conference call today to announce that Swift and Knight will come under common ownership while continuing the separate operations of both great companies. We have slides to accompany this call posted on our website at investor.knight-trans.com/events. With me today, as said, are Richard Dozer, Swift Chairman of the Board, David Jackson, Knight President and CEO, who will serve as CEO of the Knight-Swift Holding Company, Richard Stocking, Swift President and CEO, Adam Miller, Knight CFO, who will serve as the CFO of the Knight-Swift Holding Company, Ginnie Henkels, Swift Executive Vice President and CFO, and Jerry Moyes, the founder of Swift. David, Adam, and I will be handling the prepared remarks on the slides, and we'll open up the call for questions.
This call is scheduled for 45 minutes, therefore, we are limiting the questions to one question per participant. If we do not clearly answer the question, a follow-up question may be asked. I'd like to thank Jerry and the Swift team for coming out early this morning to support us. Before turning it over to Adam, I'd like to ask Richard Dozer and then Jerry Moyes if they would like to comment. Rich?
Thank you, Kevin. This is a great opportunity for our stockholders. Those stockholders will benefit from the significant upside potential of this transaction. Under common ownership, the companies together will capitalize on economies of scale and substantial synergies. This is an exciting chapter in Swift's history, which stands at 50 years and counting. Everyone who is part of the Swift team should be proud and excited about what the future holds. I am confident in the new combined team, the combined structure, and the combined future. With that, I'd like to turn it over to Jerry Moyes, the Founder and Board Member of Swift.
All right. Thank you, Rich. I'm very excited about this transaction because it really offers tremendous opportunities for both companies and both sets of shareholders. Operating the Swift and the Knight businesses separately will take advantage of both brands and the talent at both companies. I'm very confident that this is the right approach. I encourage everyone at the Swift to join me in supporting the Knight-Swift leadership team as we continue the legacy of both these companies. Thank you, and I'll turn it over to Kevin.
Thank you, Jerry and Rich. I really appreciate those thoughts. Adam, we will now give our cautionary statement and an overview of the transaction.
Thank you, Kevin, and hello, everyone. I'll first refer you to the first two slides of the presentation that contain forward-looking statements. I refer you to the safe harbor statement and the various other disclosures on our slides concerning important additional information. We'll now move on to slide 3, where we have provided a transaction overview in the slide. This is an all-stock merger. The key components are as follows: Swift shareholders will own approximately 54%, and Knight shareholders will own approximately 46% of the post-transaction stock. We will have a single class of stock with one vote per share. Knight will be the accounting acquirer, even though Swift Holdings Company will survive the merger and will be renamed Knight-Swift Transportation Holdings Inc. Knight's financial statements and earnings per share calculations will continue and will be the reference point for disclosures.
The stock will trade under the KNX ticker. The exchange ratio is fixed. Swift will conduct a 0.72-for-1 reverse stock split, and the pre-merger Swift shareholders will retain their shares. Each Knight share will be exchanged for one share of Knight-Swift. Using Knight's April 7 closing price of $30.65 as a reference point, the effect of the exchange would value each Swift share at $22.07, or approximately a 10% premium over its closing share price on Friday. Now, from a financial perspective, the transaction will be accretive to Knight's adjusted EPS over the first full quarter following the closing, even before synergies. The transaction should be significantly accretive in 2018 and beyond, if we do our jobs on the synergies we have already identified, which Dave will describe later on in additional slides.
When we talk about adjusted EPS or any other adjusted numbers, we mean the adjustments that Swift and Knight have made in their historical SEC filings, and we are excluding transaction costs, purchase accounting adjustments and nonrecurring entries to conform accounting policies. We have not yet completed the purchase accounting. The intangible amortization will be significant, and we will show that as an adjustment in future periods. From an operating perspective, Swift and Knight will continue as separate brands with separate trucking operations, separate service center networks, and separate driver pools. From a holding company leadership perspective, Kevin Knight will be the Executive Chairman, Gary Knight will be the Vice Chairman, Dave Jackson will be the CEO, and I will serve as the CFO. The board will consist of all Knight Directors and four Swift Directors.
We believed it was important to support the leadership and governance structure that has underpinned Knight's industry-leading margins and financial returns. The transaction is subject to standard conditions, including antitrust and shareholder approvals. The Moyes family, which has majority of the Swift voting power, as well as Kevin and Gary Knight, have agreed to vote in favor of the transaction, subject to customary conditions. I'll now turn it back over to Kevin to comment on the big picture.
Thanks, Adam, and if you could, let's turn to slide four. Let's get right to the question on most of your minds: Why do you guys think this will work? Let me answer that in detail. We and Swift were committed to four basic principles from the very beginning: create the best strategic position in our industry, identify significant and realizable synergies, be able to operate at Knight-like financial results, and instill a strong leadership and governance framework. We discussed these in detail with the Swift board and with Jerry Moyes before continuing down this path. We owed it to both sets of shareholders to get this right, and neither company was interested unless we could achieve all four. The transaction is all stock, which invests both sets of shareholders in future results.
The vast majority of the net worth of the Moyes and Knight families will be invested in Knight- Swift. The Knights have known Jerry for 50 years, and we worked with him at Swift for over a decade. He trusts us and is fully committed to the ongoing board and leadership team. Jerry will hold single voting stock and will cap his family voting rights at about half the number of shares his family will control. He will be able to appoint 2 directors and will support the other nominees of the board. This will be a unified governance structure. When we founded Knight, we incorporated the entrepreneurial spirit of Swift and the cost discipline and accountability that we learned from Russ Gerdin at Heartland Express.
Many parts of Knight are similar to Swift, such as our decentralized operation responsibilities and accountability pushed out to the service center level, our respect for drivers, superior customer service. We believe common perspective on key operating principles will help us find the best practices, and not only find them, but implement them. A big risk in mergers is integrating operating networks, customer service, load planning, driver management. We are taking those risks off the table. We won't subject customers to poor service and our drivers to workplace disruption. These key stakeholders will continue to be served by their existing contacts in each company. Swift has great people. This is true in many mergers, but here we actually know them. We live in the same community, and we can easily communicate.
With Richard Stocking and Ginnie Henkels pursuing other opportunities, I will become President of Swift after the close to make sure that best practices get shared and the two companies operate as efficiently as is possible. At its core, trucking is an execution business, where each load matters. Knight has a long history as an industry leader in operating efficiency. We are committed to working with Swift toward the same efficiency Knight has achieved over the years. To any Swift employees who may be listening, we have great respect for you and your organization, and I look forward to meeting in the coming months. Now on to slide five. We have been very deliberate about our description of common ownership rather than merged company.
We intend to operate the brands separately by managing at the smallest possible business unit with strong accountability, avoiding diseconomies of scale that come with size, and minimizing risk of network disruption. For these reasons, we do not have plans to downsize facilities or business units. Knight-Swift will be an industry leader in many areas, including the largest truckload fleet in North America, extensive service center network covering all major freight centers, one of the five largest operators in each of these markets, dry van, dedicated, refrigerated, cross-border, and we will also have significant presence in brokerage and intermodal. We will also be a leader in profitability. Our combined operating ratio will be among the leaders in our industry, even before synergies. Our expected synergies will be substantial. On to slide six.
When we look at this map, we see tremendous value for our customers and our drivers, and tremendous opportunity for both companies. Some people would anticipate cutting terminals and consolidating operations. We don't plan to do this, and let me tell you why. The supply chain is shortening, with distribution centers closer to end deliveries. With over 70 locations nationwide, the companies will be able to offer customers proximity to every major population center in the U.S. Even relatively short distances can make a difference in the efficiencies of pickups and deliveries, and the usage of precious driver hours of service. The same goes for our drivers. We want to maintain the convenience for our drivers, many of whom pick their carrier based on the location of their home.
These locations will be more and more valuable over the long term, as they are positioned optimally for future growth. It would be incredibly difficult and costly to duplicate this combined service center capacity. I'll now turn it over to Dave Jackson.
Thank you, Kevin, and good morning on this historic day. This combination will create the single largest truckload operating group in North America, probably the world, and the largest by a wide measure. I'll share some more comments that relate to Slide 7. Despite being the largest, we still represent a very small percent of the industry's market share. Consequently, redundancy in market served is not an issue. Most of what each company does is substantially similar to one another. There are some unique strengths particular to each company. We expect to share strengths and promptly address areas in need of improvement. In many ways, the businesses are highly complementary to one another, and both are familiar with the types of services each provides, which mitigates risk. Swift brings unmatched scale, a strong, dedicated franchise, a unique Mexico presence, to name a few.
Knight brings industry-leading returns in dry van, refrigerated, and port services truckload, a profitable non-asset logistics business that has grown to become a meaningful segment of revenue and profit, while improving return on invested capital with one of the industry's lowest operating costs per mile through effective management of safety, maintenance, fuel, and other costs. Given the broad markets we serve, each company will be able to continue most, if not all, of the revenue paths while helping one another realize greater efficiencies and improve profitability. Our experience has been that access and transparency to key information can dramatically accelerate improvement, particularly when one is looking to achieve something already achieved by another. We expect significant value creation as a result of the synergies.
We expect to achieve $15 million in synergies from the time of close, likely in the early third quarter of 2017, to the end of 2017. We anticipate adjusted earnings per share accretion over 30% in 2018, the first full year of the combination. We believe there's the potential for significant value creation from the approximate $5.2 billion combined market cap at the time of the announcement, as the economic characteristics of Swift become more similar to Knight's over time. We would not have pursued this transaction if we did not have the confidence in our ability to continue Knight's industry-leading returns in the Knight entity and have conviction to being able to help Swift accomplish similar returns. Now, if you'll follow me to slide 8.
Knight and Swift will continue to be separate companies after the close of the transaction, distinct brands with distinct management. We expect little to no change for customer and driving associate-facing activities. There are some areas that may work together closely or become one support group to the operations. Drivers have made, and new drivers will make, decisions on where they want to drive. We will not override their decisions by merging operations. Each business will recruit, dispatch, sell, manage, et cetera, independently. Different than other industries, the fastest way to accrue synergies in irregular route truckload is not through merging and consolidating operations. The asset-based truckload business is an execution business that contends with a variety of macroeconomic seasons and cycles. Our primary focus is on execution.
Higher levels of efficiency and execution are measured by a lower operating ratio, which improves with lower operating costs per mile and a higher revenue yield per mile. Execution on a per load, per truck, and per service center or per terminal basis are the foundation for achieving a low OR. Our experience has been that visibility to the right measurements at the right time and in the hands of an appropriately empowered manager can meaningfully accelerate improvement. We plan to leverage the freight market knowledge of both organizations.... This will help with the strategic consideration for the lanes and loads each company chooses to serve, and the degree to which each is willing to commit capacity through contract and non-contract opportunities. We expect this to lead to market improvement in both companies.
In general, the asset-based carriers are consistently being outspent in technology and innovation investment by the non-asset-based brokers and 3PLs in the space. We believe that accelerated development and implementation of technology will be one of the direct benefits from the consolidation of these two companies. Each company has projects at various stages that can improve visibility for customers, the driver experience, employee efficiency, and asset productivity. Next, on to slide 9. As mentioned, we expect to realize $15 million in synergies from the time of close to the end of 2017. This would roughly be a run rate of $30 million for the first 12 months. We expect synergies to ramp up more over time, up to $100 million in 2018, and $150 million for 2019.
We expect those to come from both cost and revenue synergies. We've identified several members of a cross-functional team that will serve as the transition team, and will include leaders from both companies. We've identified over 30 specific areas for improvement through collaboration or integration. Upon the close, the team will work with leaders in both companies to choose the best approach to quickly pursue opportunities to improve profitability in the identified areas. Some areas have more opportunities, such as refrigerated and brokerage, where there is a large gap in performance between the two companies. Other areas, which may not be as large, such as leveraging purchasing power and eliminating any redundant public company and other costs, will add up quickly given the size, collective size of the businesses. I will now turn it back over to Adam.
Thanks, Dave. On to slide 10. In our industry, we believe a strong balance sheet is a strategic advantage. Swift has made a lot of progress deleveraging since going public in 2010, while Knight is essentially debt-free. This results in a combined balance sheet with a manageable initial net leverage ratio of 1.3x . We also believe the combined entity will generate meaningful free cash flow that will allow us to deploy capital toward accelerated deleveraging, capital returns, and future growth initiatives. Maintaining a strong balance sheet with low levels of debt has always been a part of the culture at Knight, and we intend to pursue that same path moving forward. This concludes our prepared remarks, and I'll now turn it over to Kevin Knight.
And moving on to our final slide. Thank you, Adam. At this point, I'd like to open it up for questions. As a reminder, the call will end at 6:15 our time, which is actually 9:15 Eastern Standard Time, or is that Eastern Daylight Time? There we go. For media requests, please contact Joele Frank at 212-355-4449. For investor relations, please contact Dave Jackson or Adam Miller at 602-606-6315. We will now take questions.
At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Again, that's star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question comes from the line of Tom Wadewitz from UBS. Please ask your question.
Yes, good morning, and congratulations to everybody on the, on the transaction.
Thanks, Tom.
Kevin, I wanted to see if you could offer some thoughts on the importance of freight selection, and how you think you might be able to apply your approach from Knight to Swift, which obviously has a much larger base of trucks. I guess, historically, I think of freight selection, you know, handling the right freight is a, is one of the key components of your recipe for such strong margins at Knight. And, you know, some of the diseconomies of scale or challenges of a much larger carrier, it's just hard to, you know, to get the higher quality freight when you have so many more trucks to fill. So I was just wondering if you could say or give us some comments on, is freight selection a key driver?
If that's so, then how would you execute that across a much larger fleet at Swift? Thank you.
Yeah, well, that's a long question, Tom. I'll try to, I'll try to hit it all the best that I can. First off, freight selection is important, but we, we really look at freight selection more in conjunction with what the market is offering at that particular time and at that particular place. So a lot of that has to do with where we are in the cycle and where we are with contract and non-contract opportunities. The thing you gotta remember about Swift is, yes, they are big, but the fact of the matter is, they have a lot of service centers or terminals, and so, so at their terminal level, they're not that big.
And so when you take a national sales network like Swift has, in conjunction with local operations people, you really begin to understand what you need in order to make those trucks successful. You've also got to remember, Tom, that Swift is made up of a large, dedicated component. And so dedicated, of course, is much different than the irregular route stuff. So, and then, of course, the irregular route is broken up into several components, including flatbed, including Mexico operations, including refrigerated, including dry van.
So when you apply those, you know, 40 or so terminals, to that, to all of that, with really good people in the field that understand what you're trying to accomplish, and after we close, when we get to a point where we can share, you know, how we see all of that coming together and how it works for Knight and how it works for Swift, I think, Tom, we're going to do really, really well in making sure that we harvest the right freight opportunities with the right yield that will lead us to the highest revenue per day, which you all know, that's a critical component. Now, Tom, we need a little stronger market to accomplish all of the synergies that we've laid out, but we will get that.
It's maybe been a little slower than we would hope coming, but at some point, we will get that, especially when you think of ELDs coming at the end of this year. I mean, everybody has to recognize there's a large tier of capacity that basically doesn't operate under current regulation. And when that happens, that's going to be a big change in our space. Now, it won't happen overnight, but it will happen, and that's going to be a big opportunity as we move through improving our yields, improving our freight selection, et cetera. So I hope I answered your question, Tom, and did I?
Yes. Can I just... Am I correct in assuming freight selection is the key lever that you're going to focus on or not?
It is a key lever that we will focus on, Tom. Absolutely.
Okay, great. Thank you.
Hey, Tom, let me just add on to that for one moment. If you look at a typical bid season, each business today sees several million individual load and lane opportunities to quote and bid on. And so, technology has advanced in that area, both it's advanced on the shipper and customer side, which is why we see bids so frequent and a routine now, but, but there are optimization tools that exist for us today.
And so, you know, when you consider the number of opportunities that will be presented on an annual basis for us to then think through and work and identify which economics work best, to drive revenue productivity on a per truck basis, this is a place where technology can play a role for us, and the far reach of two very diversified customer portfolios or the two customer portfolios that both businesses bring together. And so, over time, I think that that just gets better and better for us.
That's great. Thank you for all the perspective. I appreciate it.
Thanks, Tom.
Next question is from the line of Ken Hoexter of Bank of America Merrill Lynch. Please ask your question.
Hey, Kevin, good morning, and congrats again on the landscape-changing move here. Interesting stuff, but Dave, in the past you've noted, or Kevin, on the Barr-Nunn, it works so well because it operated so well when you acquired it, so leaving it to operate independently was a key focus for you. How do you change operations at Swift? Is it to move from contract to more spot as Knight does? Or maybe you can talk a little bit about how you would go about addressing that and shifting that operating ratio in such a large way.
Well, we'll probably both comment, both Dave and I. Hey, thanks for being on the call, Ken. First off, Swift has extremely good operations, and you know, we do, too. So we will work together to find the absolute best practices in all areas of our business. So when we talk about finding the operating points that we need in order to gain those synergies, I mean, there are multiple areas. Yield, Ken, will be one of those. And you know, yield comes from both markets, from both contract and both non-contract. And we will leverage both skill sets, both operations, to absolutely improve our yields as the market cooperates with that initiative.
So, so much of our synergy will come from that. But, but secondarily, when you have two companies like Swift and Knight, you have significant opportunities to improve your purchasing economies of scale. We'll get better in the area of insurance and claims. We'll get better in the area of fuel costs. We'll get better with technology. Every dollar that we spend on technology, and every dollar that Swift spends on technology, will now be leveraged across the entire spectrum. You guys know that our non-asset-based competitors are spending lots of money on technology, and pretty much the asset-based guys have not been able to do that. But with this type of transaction, we will leverage technology across the entire enterprise.
Everything we're doing in the area of brokerage and transportation management, everything Swift's doing in the area of brokerage and transportation management, will basically be shared across both companies. We're gonna, as we've said before, we're gonna grow that logistics space. This is a capital-intensive business, and by dang, if we're giving all this capacity that we pay for as two companies, we're certainly gonna find significant opportunities to get those non-asset-based opportunities in the logistics business and our brokerage. So, Dave, you've probably got some things to add to that.
I would just add that, Ken, you know, this ultimately comes down to the economics on a per truck basis. You know, we're gonna try and be as efficient as humanly possible for everything that supports the truck, but the revenue generation happens on a per truck basis, which is one of the reasons why the decentralized model is so valuable. Because it enables us to get our arms around a business and manage it one truck at a time, an individual driver at a time.
Collectively, when you have the right focus, the right expectations, and to drive the economics on a per truck basis, which we would look at that as revenue per truck, per day or per week, and which is basically made up of 2 inputs, miles per truck per week, and rate or yield per mile. We feel comfortable that we understand those economics, and then this provides a structure where we can manageably work our way from individual trucks to individual service centers or terminals, as they're referred to in the Swift network, which collectively build all the way up to this fleet of over 23,000 trucks. But the focus and the effort and the understanding, it all comes down to a per truck basis.
So as my comment was earlier today, it ultimately is a business, an execution business that's about visibility and accountability. And so I think that that's a key part in how we continue to move forward and improve from an operational standpoint.
Great. Thank you very much for the insight.
Thanks, Ken.
Thanks, Ken.
Our next question comes from the line of John Larkin of Stifel. Please ask your question.
Yes, good morning. Congratulations on such a interesting combination here, completely unexpected, I think, by everyone. Dave, you talked about the synergy ramp here that's going to develop over the next couple of years, and I think we can all get our arms around the projected cost synergies that you're talking about. But the revenue synergies, if you could maybe give us a little clarity as to what you're talking about there. Would we basically apply the combined operating ratio to that revenue synergy to come up with the resulting incremental operating income, or how should we think about the revenue synergies in relation to the cost synergies?
Yeah. Well, you know, our outlook here is for things to get a little bit better. As we talked, I think, in our last quarterly conference call, it's been very rare that we've seen contract rates negative in consecutive years. It almost never happens, but we're seeing that in this current environment. And so, that typically shows us that we're close to an inflection point. And so as we look out ahead, we expect those revenue synergies to accrue at a much faster rate when we look into really beginning towards the end of this year, in the fourth quarter, when we think we'll be just past the inflection point, and then, building throughout 2018, and, hopefully, that continues beyond.
Kevin alluded to the level playing field in terms of compliance enforcement with ELD coming, and of course, that will be a factor in 2018 and beyond. So, you know, I think a little bit of a lift, a little bit of help from the market is we're banking on that for some of these revenue synergies. Now, from a freight selection and helping one another, those are clearly opportunities that exist just as we as we collaborate after the close and share our market intelligence, which we've built.
Given the large dedicated portion for Swift, you have perhaps some stability there in a certain subset of the rates, and then hopefully Swift will experience the kind of upside in improving rate environments that has been the pattern for Knight now at least the last two upturns in the environment. As you saw, what happened with Knight's revenue per loaded mile in 2014, really started in late 2013, but throughout 2014, throughout 2015. And so, you know, we would like to see some progress that's a little bit more along the Knight side on this next upturn in terms of Swift's rates.
And John, maybe I'll just jump in here. I think a key part of this is just how we approach the market in conjunction with assets and non-assets. So basically, when you're in the space of the C.H. Robinson of the world, it pulls you very heavily into the non-contract market. When you run the amount of trucks that Swift runs, it pulls you very heavy into the contract market. At Knight, we've experienced a very good combination of both that leads to improving yields for your asset-based business. So I believe that just based on our experience, I think we'll have a lot to add there, as we work with Swift in that area. And hey, let's not forget about Swift's dedicated piece, like Dave brought up.
Swift is one of the premier providers of dedicated in this industry. And hey, we do dedicated also, but at a much smaller level. And I believe that we have a lot to learn on the dedicated side of the business. And one thing you know about us at Knight, John, if we get a good dedicated deal, a solid dedicated deal, we're going to get the cost as efficient as we possibly can. So, I think there's lots of opportunities in front of us to really improve our yields going forward.
Just maybe as a clarification follow-up on this.
Yeah.
It seems to me that some of those revenue synergies are built around the notion of supply and demand tightening over the next couple of years, which would be the natural progression of the cycle. In theory, I guess, that would happen irrespective of the combination of the two companies. Perhaps some people might not think of that benefit as a true synergy. It's really related to sort of the market cycle and would benefit both components of the combined organization, even if they hadn't combined. Am I thinking about this correctly?
Yeah, that's exactly right, John, and that's why I say you've got to add to that thought process our approach to the market in conjunction with our non-asset offering. We will do very well in the contract area, and we will do very well in the non-contract area, both companies.
Very good. Thank you.
Thank you.
We have a question from the line of Brad Delco of Stephens. Your line is now open. Please ask your question.
Hey, Brad.
Good morning. Congratulations to everybody on this this big announcement. Kevin, I just wanted to get, you know, going back to the question of why now? It seems as if this is a big validation for the thesis that ELDs will level the competitive playing field. I'm just curious if you could expand on that just a touch and say, yes, yes or no, whether or not that's a big part of what gives, I guess, both entities the confidence to do this deal now. And then if I could just try to tie in, you know, trucking has been weak, and the economy, I guess, the signals have suggested it's really not as weak.
The big question we get is whether or not there's been some interruption with e-commerce in terms of what's going on with these big box retailers and whether that's negatively impacting truckload. So I just... Maybe you could kind of expand on both of those and how this combination can, can really drive the value for both shareholders?
Yeah. Yeah. Well, thanks, Brad. I'll start, and if Dave or Adam want to jump in, they're welcome to help me. First off, let's talk about capacity. Going back to 2014, our industry, for many players in the industry, they continued to think that we were a growth industry, and we're not. So, Brad, hey, that is still having a negative impact on our markets. But one thing that we know is that will self-correct. Those folks that went out and bought trucks, when they shouldn't have, and when they took on additional debt as a result of that, that will come back to bite them and always does, especially as we go into our second year of negativity on rates.
So capacity is already, even though slow, starting to correct itself. As far as e-commerce, we believe that e-commerce, long term, is good for truckload, okay? So I can't honestly tell you, Brad, if e-commerce is taking away from the truckload space, but I will tell you that e-commerce wants to get as much freight as they can, as close to the end consumer, as fast as they can, and there is no better service than truckload to do that. And all of our brands are big players in the e-commerce space. So I do not believe that e-commerce is having a negative impact on truckload. I would say maybe quite the contrary. As far as why now, well, you know, the moon and the stars aligned.
When you, when you do a deal, you know, things really have to come together. And I will tell you, Brad, that at every one of our, you know, strategy sessions at Knight over the last several years, we've, we've talked about this combination. Some years for five minutes, some years for a half an hour. And, you know, we just felt like, this past summer, that, that there could be an opportunity. And so we reached out to Richard Dozer and talked about it, and it, it, it took off, from, from there. Sometimes, moving a little slower than we had hoped, no pun intended, Rich. But really, everybody worked very, very hard, to make this happen.
And also, we are in the same town. I mean, how often are you afforded the opportunity where you merge with somebody who's a half hour away, somebody who you used to work for, somebody who you know many of their employees, you know their culture, you understand they have the same desires around safety and service and profitable growth that we do? And how often are you presented, Brad, an opportunity where you believe that based on those synergies we've discussed, we have the potential to double our market cap in three years? I mean, that doesn't happen. And as this deal, as the momentum built, our energy has built.
And so, so really, I don't think the why now has so much to do with the ELDs or so much to do with the market or so much to do with e-commerce or where we are. It's like, this is an opportunity, Brad, that could not be passed up by either company. And you know, we've got a lot of work to do, but oh, my gosh, are we excited! And I don't know, Dave, do you have something to add?
I can't match the passion, but clearly, Brad, we would do this deal in any market. The ELDs, that's a favorable backdrop, but that, but we would have done this in any market. You just can't get the people, the customers, the capacity, the competencies in any other way or in any other place. And the potential for this, this value creation, as Kevin just alluded to, from the $5.2 billion that it starts pre-announcement to what we have our sights set on as being $10 billion over the next three years, you just can't find value creation opportunities like that.
You know, and one, one other thing, Brad, that, 'cause we're out of time here, but one other thing that I wanna add. I mean, when you think of our drivers, can you imagine working for an organization that has the freight opportunities that this combined, that this, that this company will, will have between these brands? I mean, when you think, when you think of short haul, when you think of refrigerated, when you think of drayage, when you think of regional, when you think of dedicated, if I'm a driving associate, I am thinking, oh, my gosh, they have everything and anything that I, that I could want.
From a customer perspective, when you think of the capacity that we bring with our assets, the capacity we bring from our third-party carriers, and where technology is headed within the two organizations to offer the visibility of their freight all the time, I mean, this is a huge win for our customers. And then the last thing is for our other people. I mean, good heavens! I remember when we started Knight, you know, we had been with Jerry for many years, and we had learned his entrepreneurial spirit. And then I had developed a relationship with Russ Gerdin, and I thought, Gosh, I wonder if I can get him to show me anything. And he showed me some things. He wouldn't show me all things.
But when I think of any of the associates in our company, think of the opportunity to learn, I mean, I can't wait to be involved with Swift again and learn all the great things that have taken place since we've been gone. And I can't wait to share all of the things that we've created in the last 26 years. So, Brad, hey, we're really, really excited. And hey, by the way, I mean, these are our last remarks here. This is the last question. I wanna thank Richard and Ginnie. Let me tell you, we have been able to work a little together in the last few weeks, and let me tell you, our teams have worked impeccably together.
I wanna thank Rich Dozer for hanging in there with us. And I appreciate him understanding the vision. And I wanna thank Jerry. Jerry is putting enormous trust in these combined organizations and in not only his family, but in our family, too. And hey, I wanna thank all of our people for all the good work that they do every single day, every single load, picking it up, delivering it on time, doing all the things that are required in this amazing business. And hey, with that, we'll conclude the call. We appreciate your interest. And Chris, I'll turn it back to you.
This concludes today's conference call. Thank you for participating. You may now disconnect.