Global merger and acquisition (M&A) activity in the transport and logistics sector was subdued in the fourth quarter
of 2014, finishing a mostly flat year for M&A, according
to an analysis released late last month by the U.S. arm of
consultancy PwC.
For the year, there were 208 transactions valued at more
than $50 million, resulting in a total deal value of $75 billion, the report said. In 2013, there were 205 deals valued at
a collective $75.1 billion. Fourth-quarter 2014 deal volume
totaled 53 transactions worth $15.9 billion, significantly
below year-earlier levels, PwC U.S. said.
Jonathan Kletzel, who heads PwC’s transportation and
logistics practice, attributed the 2014 declines to 6 percent
fewer megadeals–those valued at $1 billion or more—than
in 2013. Most of the big 2014 deals were in the infrastructure category and involved toll roads and ports, he
said. About 47 percent of the dealmaking occurred in the
shipping and trucking sectors, with most of the trucking
activity occurring in North America, Kletzel said. Half of
the acquiring companies were based in the Asia-Pacific
region, with 28 percent in Europe and 23 percent in North
America, he said.
So-called local transactions accounted for 70 percent of
total activity, while cross-border deals, especially in emerg-
ing markets, declined, Kletzel said. He expects that trend to
continue in 2015, mainly because local transactions involve
more redundancies in transportation networks and opera-
tions, are usually easier to execute, and yield more synergies
than cross-border integrations.
Kletzel said he’s cautiously optimistic about 2015 M&A
activity, saying the market should be buoyed by an improving U.S. economy, a strong U.S. dollar that will make offshore targets more attractive for U.S. players, and the dramatic decline in oil prices that should free up more capital
for acquisition-based growth and drive expansion plans of
some transport operators. Kletzel cited the example of an
airline that might be encouraged by lower jet-fuel prices to
expand its route offerings and could make an acquisition to
implement that strategy.
A DIFFERENT PERSPECTIVE
Benjamin Gordon, CEO and managing partner of BG
Strategic Advisors LLC, a supply chain M&A advisory firm,
had a more favorable view of 2014 performance. Gordon
said last year’s transportation and logistics activity was
fueled by a massive rise in overall M&A flows. Total U.S.
M&A volume hit $1.6 trillion in 2014, a 43-percent jump
from 2013 and the highest activity on record, he said. Initial
public offerings raised $96 billion last
year through 293 deals, the highest
level since 2000, he said.
“Overall, we are seeing an influx
of capital into the transportation and
logistics sector,” Gordon said, adding
that within the supply chain, “the deal
and capital markets are booming.”
Gordon didn’t have a breakdown of
2014 supply chain M&A activity within the total market.
Gordon said the upward trend
should continue, noting that transport and logistics companies have
traditionally rewarded investors with
attractive returns; that banks, private
equity firms, and public markets are
eager to fund acquisitions; and that
publicly held companies must pursue
acquisitions to fulfill aggressive expectations for growth.
16 DC VELOCITY MARCH 2015 www.dcvelocity.com
go figure …
$200 million
The revenue UPS could gain by its Feb. 2 move to
raise fuel surcharges on air and ground services.
The additional revenue will be generated just by
adjusting data on spreadsheets.
SOURCE: SHIPWARE LLC
PwC analysis: Global transport
logistics M&A flat year over year
Hyster Co. has received a 2014 Good Design award from the Chicago
Athenaeum Museum of Architecture and Design for its W45ZHD walkie
pallet truck. … enVista, a supply chain consulting and IT services firm,
has been recognized as one of Indiana’s 100 Best Places to Work by the
Indiana Chamber of Commerce. … Manhattan Associates recently named
Fortna to its Partner Performance Club for the seventh consecutive year.
… Associated has received MVP Status for 2015 from the industry trade
association MHEDA. This recognition is given to association members that
demonstrate a commitment to business excellence, professionalism, and
good stewardship. … For the second consecutive year, Unishippers Global
Logistics LLC was recognized on Franchise Gator’s List of Top 100 Franchises.
… Marathon Data Systems, a provider of software-as-a-service solutions
for transportation and logistics companies, was listed on SmartCEO
magazine’s “Future 50” list for the New York market. … Teletrac Inc., a GPS
tracking and fleet management solution provider, has been named a 2015
CES Innovation Awards Honoree in the safe driving category.
accolades
