Ogden-based Flying J and Tennessee-based Pilot Travel Centers have agreed to merge their truck-stop operations, a move that will allow that aspect of Flying J's business to emerge from bankruptcy with "all creditor obligations paid in full," the two announced Tuesday.
In December, Flying J Inc. and its Big West refining and Longhorn Pipeline subsidiaries filed to reorganize under Chapter 11 bankruptcy. Other operations, including those in Canada, were not included.
Flying J and Pilot filed a letter of intent Tuesday with U.S. Bankruptcy Court in Delaware. A news release announcing the planned merger said that Pilot has agreed to provide $100 million in "debtor-in-possession" financing for Flying J's operations, "subject to court approval and various conditions."
The details of the merger will be worked out in coming months, said Crystal Call Maggelet, Flying J's board chairwoman, who said the move would allow the company to quickly emerge from bankruptcy.
From the consumer's view, things won't look any different at Flying J truck stops, said spokeswoman Virginia Parker. Even the names will stay as they are right now, unless current plans change. While details are being worked out, Parker said, "it will be business as usual from the consumer side."
The Wall Street Journal reported Tuesday that a court filing outlining the deal says Flying J will receive a stake in Pilot plus $300 million to $500 million in cash. The equity portion of the deal will be based on an enterprise value for Pilot of $3.3 billion and for Flying J of $1.2 billion, court papers said.
The preliminary merger agreement includes Flying J's core travel-plaza business. The merger excludes Longhorn Pipeline, Big West Oil, Flying J Oil and Gas, Haycock Petroleum and Transportation Alliance Bank. The release says the Utah company is "in the process of pursuing or evaluating alternatives for each of these other businesses."
Last month, Flying J announced plans to close seven of the restaurants located within its truck stops, including one in Payson.
Flying J has more than 270 truck stops, while Pilot operates 300. Both companies are among the largest privately held businesses of their kind in the nation. Flying J had 2007 sales exceeding $16 billion, and it employs 14,700 people in the U.S. and Canada, including all of its divisions and operations. Pilot employs 13,000 nationwide.
Parker said that no announcement has been made yet regarding where the headquarters for the merged operations will be located.
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