The FedEx Route Sales Process (503) 664 – 0753

Introduction The FedEx Corporation allows its independent contractors to privately sell their routes to any qualified buyer of their choosing, so long as the new buyer meets the FedEx contractor requirements. FedEx does not participate in the negotiation of the sales terms; their involvement in the deal is limited to qualifying the new buyer and transferring the routes into their corporation. (503) 664 – 0753http://

Sales Process Overview Contractor expresses interest in selling routes Engagement agreement signed to sell routes Route package compiled / valuation determined Buyers solicited, NDAs signed, financial qualification Buyers given route package for review Q&A session between buyer and seller Buyer submits letter of intent Buyer undergoes 3- 4 week due diligence period Purchase Agreement drafted Escrow opened and deposit made by buyer Buyer submits RFI to FedEx and begins background check Closing/Fund Transfer/Route Transfer upon FedEx Approval (503) 664 – 0753http://

Valuation Considerations FedEx routes are sold on a multiple of earnings “Earnings” are defined and calculated by re-casting P&L to reflect the normalized profit that the business produces. This typically involves identifying the annual core operating business expenses (fuel, payroll, insurance, repairs & maintenance, debt service, etc.) and subtracting that figure from the annual gross income Once the “Earnings” figure is identified, an industry multiple is applied and the resulting figure is a suggested asking price. (Generally we ask for a 2.5 – 3x multiple of earnings) Depending upon the debt service of the fleet, the valuation may change considerably. (503) 664 – 0753http://

Offering Memorandum When compiling an overview of a group of FedEx routes, the following items are typically included in the package that will be presented to the buyer: 1099 for previous year “Normalized” profit and loss statement that reflects any discretionary (non-business) or one-time expenses Overview of the vehicle fleet (year, make, model, mileage, debt) Employee list (name, tenure, compensation) Geographic overview of the routes Sample settlement statements Tax returns / 1120s from year(s) prior (typically provided during due diligence) (503) 664 – 0753http://

Sample Buyer Activity Below are some buyer statistics for a transaction we completed in May, 2013: # of times opportunity was displayed to a buyer: 4,888 # of buyers who read the details of the opportunity: 417 # of inquiries received: 37 # of incoming phone calls: 29 # of NDAs sent out to prospective buyers: 48 # of buyers financially qualified (need at least $500k liquid cash): 19 2 offers received Cash deal accepted by seller (503) 664 – 0753http://

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