newsworthy
Warehouse automation equipment supplier Swisslog has acquired
the systems integrator Forte Industries, a move that enables the
Swiss company to expand its presence in e-commerce fulfillment
and the midrange material handling segment of the U.S. market.
Forte will continue to operate out of its Mason, Ohio, headquarters as a standalone unit and will maintain its own name. Terms of
the deal were not disclosed.
The biggest immediate impact of the deal will be the departure
of company founder Gene Forte, 65, who created the company 35
years ago and stepped down as CEO on April 20 to assist with the
transition in an advisory role, said Tom Rentschler, vice president of
sales and marketing for Forte.
Gene Forte has been replaced by A.K. Schultz, a 15-year veteran
of the engineering and automated material handling industry
who had previously served as vice president of customer service in
Swisslog’s North American headquarters in Newport News, Va.
“I am enormously proud that a global systems integrator with the
stellar reputation of Swisslog sees Forte as such a valuable addition
to their team,” Gene Forte said in a press release.
Aside from the change in leadership, the merger is not expected
to lead to staff cuts; in fact, Forte expects to maintain its full staff
and even continue its recent hiring trend, Rentschler said.
Swisslog’s decision was driven in part by the rapid expansion of
the e-commerce market, which has boosted demand for piece-pick-ing equipment in warehouses to fulfill the growing number of
small orders sent to individual customers, said Bill Leber, Swisslog’s
director of business development and marketing.
Swisslog sells advanced automation systems such as automated
storage and retrieval systems (AS/RS) in the global, top-tier market sector. By acquiring Forte, it gains a valuable presence in the
semiautomated systems used by many mid-tier warehouses to ship
smaller orders and meet the demands of omnichannel distribution,
Leber said.
The move represents continued growth for Swisslog, which itself
was acquired in 2014 by the German robotics firm Kuka for $356
million and has since kept expanding. The company’s Warehouse &
Distribution Solutions (WDS) division has increased its number of
North American employees by 25 percent over the past two years.
—Ben Ames
go figure …
58%
The percentage of shippers in a survey who said March truckload capacity
was tight. That is a decline from 95 percent in the fourth quarter, the
biggest sequential drop since the third quarter of 2006, about the time the
trucking industry went into recession.
SOURCE: WOLFE RESEARCH
Swisslog acquires Forte Industries in bid to
meet e-commerce demand
about 20 percent cheaper than it
would have been a year ago. A strong dollar
elevates the purchasing power of U.S. com-
panies looking to expand in markets like
Europe via acquisitions. “We are buying
at an opportunistic time,” Jacobs said. He
added, though, that the bigger bang for the
acquisition buck was “just a side benefit.”
Similarly, the strong dollar aided FedEx
Corp. in its $4.8 billion acquisition of
Dutch rival TNT Express, also announced
last month. UPS Inc., FedEx’s chief com-
petitor, bid $6.8 billion for TNT Express
in early 2012, a time when the euro’s value
relative to the dollar was much higher.
XPO gets a foothold in a region that is
roughly twice the size of the U.S. mar-
ket. Perhaps more important for XPO,
most European firms don’t outsource their
logistics functions, creating opportunities
for the company to demonstrate its value.
Jacobs estimated that only about 27 per-
cent of European firms currently outsource
their logistics work.
Jacobs’ pivot to Europe comes on the
heels of XPO’s losing out on several attrac-
tive bids. Besides the Jacobson deal, it
saw Singapore-based third-party logistics
service provider (3PL) APL Logistics fall
into the hands of Japanese giant Kintetsu
World Express—thwarting Jacobs’ desire
to establish a foothold in the trans-Pacific
market—and, most recently, Command
Transportation LLC, a Chicago-based
truckload broker that Jacobs coveted,
acquired by Echo Global Logistics Inc.
Jacobs has said he will not overpay for
an asset no matter how desirable, and it
is believed the winning bidders in those
deals went to levels XPO would not match.
Dentressangle was purchased at a multiple
of 9. 1 times projected 2015 earnings before
interest, taxes, depreciation, and amorti-
zation (EBITDA). In today’s M&A envi-
ronment, that is considered a reasonable
multiple for a successful 3PL.
In the interview, Jacobs said XPO was
“quietly talking” to other European companies about possible tie-ups. Now, with
a highly visible asset like Dentressangle in
tow, those conversations will likely take on
more intensity, he said.
—Mark Solomon
