EGL to Buy Circle International for $543 Million

EGL Inc. agreed to buy rival Circle International Group Inc. for $543 million in stock to boost the freight-shipping company’s international presence. EGL said each of about 17.65 million Circle common shares will be converted to one share of EGL, valuing Circle at $30.75 a share. Based on EGL’s closing price Friday, that’s a 22% premium. San Francisco-based Circle has more than 300 shipping centers in more than 100 countries. EGL has 92 terminals in nine countries, most of which are in North America. The transaction is expected to close in the fall and immediately add to earnings before acquisition-related charges. The companies had more than $1.4 billion in combined revenue in fiscal 1999. EGL said it will change its fiscal year-end from Sept. 30 to Dec. 31. The transaction will be accounted for as a pooling of interests. In Nasdaq trading, shares of Houston-based EGL fell $2.52 to close at $28.23 and Circle shares rose $2.31 to close at $27.44.