Pittston Co., a Connecticut conglomerate, has agreed in principle to purchase WTC International, a "heavyweight" air freight carrier based in Newport Beach, and plans to merge the company with its own air freight subsidiary, Burlington Air Express of Irvine.
The acquisition, valued at about $57.9 million, will make the combined operation the nation's second-largest "heavyweight" air freight concern, second only to Emery Air Freight, a WTC executive said.
The move comes just one day after another big air freight firm agreed to be acquired. Over the weekend, Purolator Courier directors backed a $268-million leveraged buyout offer from PC Acquisition, a private concern including eight Purolator executives and E. F. Hutton LBO, a subsidiary of E. F. Hutton Group.
Under terms of the WTC acquisition agreement, Pittston would exchange 0.523 shares of its common stock for each of WTC's outstanding 8.6 million common shares. Pittston stock closed Monday on the New York Stock Exchange at $12.875, down 50 cents. In trading on the American Stock Exchange, WTC shares closed at $6.25, up 37.5 cents for the day.
"Our strategy is to become the biggest force in the international arena," said Roger MacFarlane, WTC's chief executive, who will stay with the firm.
MacFarlane said that if Emery's small-package operation on the domestic front were excluded, it and the merged Pittston companies would be about the same size. In international business WTC is "slightly smaller" than Emery, he said.
Both WTC and Burlington deal with "heavyweight" air freight, weighing from 70 to 100 pounds, a Burlington spokesman said.
WTC said its international freight operation contributes about half of its $200 million in yearly revenues. The company reported earnings of $1.3 million for its third quarter ended Nov. 30, and MacFarlane said he expects a $1-million profit for the fourth quarter, which ended Saturday.
Burlington, with about $450 million in annual revenue, has 20 aircraft flying to about 21 cities. It has concentrated on next-day delivery, while WTC has been primarily known for second-day service on the domestic market.
MacFarlane said the two firms will be run as "parallel companies" and will not move into the same building or change their names.